Writ petitions filed under Article 226 of the Constitution of
India praying for an issuance of writ of Declaration holding and declaring that
the Provisions of the Telecommunication (Broadcasting and Cable) Services
Interconnection (Addressable Systems) Regulations, 2017 notified on 03.03.2017
and the Telecommunication (Broadcasting and Cable) Services (Eighth)
(Addressable Systems) Tariff Order, 2017 notified on 03.03.2017 to the extent
that they have the effect of regulating, determining or otherwise impacting
content creation, generation, exploitation, licensing and terms and conditions
for exploitation of content and broadcast reproduction rights and in particular.

are unconstitutional and ultra vires the provisions of the TRAI
Act, 1997 inasmuch as they are beyond the scope of the jurisdiction of TRAI
conferred under the TRAI Act, 1997 and consequently, quash the same.

A Division in the Bench created this reference. Ironically, answering
the reference would create a decision of the Division Bench.

2. If patience is considered as a virtue, it could be stated
to have well served, upon hearing the submissions of eloquence of the learned counsels
representing competing interest.

3. Heard the learned Senior Counsels and learned counsel appearing
for the petitioners, respondents and intervenors and perused the documents,
pleadings and written arguments.

4. SCOPE OF REFERENCE:-

4.1. Before venturing into the case in detail, it would be appropriate
to define the role of this Court as the boundary lines are to be defined, drawn
and marked. Clause 36 of the Letters Patent of the Madras High Court defines
and delineates the contours of the power to be exercised by the learned single
Judge, when a reference is made as to the decision given on any point of
difference. Apropos Clause 36:-

“36. Single Judges and
Division Courts:- And We do hereby declare
that any function which is hereby directed to be performed by the said High
Court of Judicature at Madras, in the exercise of its original or appellate
jurisdiction, may be performed by any Judge, or by any Division Court thereof, appointed
or constituted for such purpose, (in pursuance of Section 108 of the Government
of India Act, 1915), and if such Division Court is composed of two or more
Judges, and the Judges are divided in opinion as to the decision to be given on
any point, such point shall be decided according to the opinion of the majority
of the Judges, if there shall be a majority, but if the Judges should be equally
divided (they shall state the point upon which they differ and the case shall
then be heard upon that point by one or more of the other Judges and the point
shall be decided according to the opinion of the majority of the Judges who
have heard the case included who those first heard it.)”

4.2. The role required to be played
by a single Judge is accordingly distinctly marked. This specific role assigned
is to confirm either of the decisions on a point of difference. Even in a case
where the exact point of difference is not indicated, the Reference Court can formulate
and proceed to answer it on a reading of the respective views. Such a role
would encompass both fact and law. For concurring with a view of one as against
another, the Reference Court can give its own reasons by supplementing it. On
the same score, if the ultimate decision is one and
the same, but reasons being different, the Reference Court cannot go beyond it.
The power available cannot be equated with that of a review nor an exercise
resulting in sitting in judgment over the other.

4.3. After completion of the main round of arguments, the learned
Senior Counsels appearing for the petitioners took an unexpected stand against
the grain on the restrictive scope of reference inter alia contending that both
the learned Judges concurred with each other on the jurisdiction of the Telecom
Regulatory Authority of India Act, 1997,(hereinafter referred to as “the TRAI
Act, 1997”) over “content”. Resultantly, the one and only issue to be
considered is to the existence of “content” as a “fact” in the impugned
Regulations and Tariff Order. The said contention so made cannot be
countenanced for more than one reason. It is an half hearted attempt to read
the judgment as a statute. In the lead judgment, the scope of the TRAI Act,
1997, The Copyright Act, 1957 and the Tamil Nadu Cable Television Networks
(Regulation) Act, 1995, and rules were indeed considered, though to a limited
extent. While it is a case of the petitioners that the regulatory authority,
hereinafter referred to as TRAI, through the impugned Regulations and Tariff
Order, regulates the “content”, no such power is available under the TRAI Act,
which jurisdiction is occupied by the Copyright Act, 1957. In the differing judgment,
the Hon'ble Chief Justice has clearly stated in paragraph 3 of the order that
the question raised in the writ petitions is to the jurisdiction of TRAI on the
availability of the power under the TRAI Act to issue the impugned Regulations
and Tariff Order. Incidentally, it was further held that sufficient power is
available in the TRAI Act and the Copyright Act, 1957, deals with a different
field. The learned Chief Justice has come to the conclusion that the power
under the TRAI Act is wide enough to pass the impugned Regulations. Thus, the submissions
made can only be termed as a leap frog attempt to over simplify the issue by a
strategic shift through the art of advocacy perhaps warranted by the direction
of the wind.

4.4. The learned Senior Counsels appearing for some of the respondents
inter alia would contend that the decision of the learned Chief Justice qua
regulation 7(4), which places a fetter on the discount offer to the distributor
being that of the single Judge requires to be dealt with by this Court. To be
noted, the aforesaid Regulation 7(4) has to be read with proviso to tariff
order 3(3). Though this Court is tempted to agree with the submissions made by
the learned counsels, with specific reference to the grounds of challenge as
recorded in the lead judgment in paragraph 4(b) and 6(i)(a) that the writ
petitioners are not assailing the impugned order on merit, the reasons assigned
by the learned Chief Justice including the scope of invoking the extraordinary
and discretionary power conferred by the constitution to Article 226, the issue
qua price fixation and the existence of a manifest arbitrariness, total and
substantive unreasonableness qua a subordinate legislation is unable to accede
to the request made.

4.5. Even assuming the reasons assigned by the learned Chief Justice
are different, the ultimate result is the same insofar as the regulations and
tariff order referred to supra are concerned. Further more, Clause 36 of the
Letters Patent clearly prohibits such an exercise. If for the argument sake,
the decision of the learned Chief Justice is taken as that of a single Judge,
going into the same on merits by this Court would lead to exercising the power
of review, which is also not available. Accordingly, the feeble, half hearted submissions
made by the learned counsels for the respondents also stand rejected.

4.6. In the lead judgment, the following conclusion was arrived at.

“8(a) Owing to the narrative,
discussion and all that have been set out supra, those of the impugned
provisions in the said regulations and said tariff order which touch upon
content of the programmes of broadcasters are liable to be struck down as not
in conformity with the parent Act / plenary Act. Therefore, clauses 6(1),
second proviso to 6(1), proviso to 7(2), 7(4), first proviso to 7(4) and 10(3)
of the said Regulations and clauses 3(1), 3(2)(b), second proviso to 3(2)(b),
first proviso to 3(3), second proviso to 3(3), third proviso to 3(3), fourth
proviso to 3(3), fifth proviso to 3(3), sixth proviso to 3(3) and 3(4) of the
said tariff order are struck down as not in conformity with the parent act,
i.e., TRAI Act.

8(b) With regard to the other two impugned provisions, as we were given
to understand in the course of the hearing that they are relevant and necessary
for some other clauses also other than those which have been put in issue in
the instant writ petitions, they deserve to be saved to the extent they survive
and serve the purpose other than serving implementation or any other purpose of
the provisions which we have struck down. Therefore, the other impugned
provisions, i.e., clause 11(2) in the said Regulations as also clause 4(2) in
the said tariff order will continue to be in the books, but cannot be pressed
into service for anything to do with the provisions which we have struck down
supra. In other words, these provisions, i.e., clause 11(2) in the said
Regulations as also clause 4(2) in the said tariff order can be operated if it
can be operated for other provisions of the said Regulations and said tariff order,
other than those which we have struck down.”

4.7. In the differing decision, the Hon'ble Chief Justice
has concurred with sub paragraphs 1 to 4 of the lead judgment. Therefore, these issues have attained finality.

4.8. The conclusion of the learned Chief Justice is as follows:

“58....... that the provisions of the impugned Regulation and the impugned
Tariff Order are not in conformity with the TRAI Act. In my view the impugned provisions
neither touch upon the content of programmes of broadcasters, nor liable to be
struck down. However, the clause putting cap of 15% to the discount on the MRP
of a bouquet is arbitrary. The said provision is, in my view, not enforceable.
In my considered view, the challenge to the impugned Regulation and the
impugned Tariff Order fail.”

Hence, only these points of differences leading to the respective decisions
are to be answered by this Court in either way.

5. FACTUAL MATRIX AND ISSUES:-

5.1. Admittedly, in the case on hand, no point of
difference was framed at the time of reference. Thus, this Court can frame and answer
accordingly as held in ALL INDIA ANNA DRAVIDA MUNNETRA KAZHAGAM
V. THE STATE ELECTION COMMISSIONER, REP., BY D.CHANDRASEKARAN AND OTHERS((2007)
2 Law Weekly 1).
The following passage would be of relevance.

182. Even though Clause 36 of
the Letters Patent requires that if the opinion of the Judges should be equally
divided, they shall state the point upon which they differ and the case shall
then be heard upon that point by one or more of the other Judges and the point
shall be decided according to the opinion of the majority of the Judges who
have heard the case including who those first heard it, no specific point on
which difference has arisen has been specified. When the matter was placed before
me, at the threshold this aspect was highlighted by me and the learned counsels
appearing for all the parties have stated that even though points of difference
have not been specifically pointed out by the Division Bench, the difference as
apparent from various discussions and conclusions of the two learned Judges
should be culled out and should be decided on that basis without returning the
matter for spelling out the difference.

5.2. For deciding the issues, a factual setting is necessary. In the
lead judgment the facts have been captured with abundant clarity. Therefore,
this Court is relieved of the repetition of factual narration except to the
extent required.

5.3. The petitioners are broadcasters and television channels. The broadcast of the petitioners is meant to reach the general
public being the subscriber. The broadcasting would involve both uplinking and
downlinking. It has got three principal actors in its exercise viz., broadcasters-petitioners,
distribution platform operators (multi system operators, etc.,) and the
consumers, who are otherwise called customers/subscribers. There is also a
fourth fringe player whose limited role stands in between the distributor
platform operator and the subscriber called local cable TV operator.

5.4.
As the telecommunication service in
general and broadcasting service, in particular, involves a regulatory regime
apart being governed by a sector specific Act, the process of uplinking and downlinking
by a broadcaster requires permission, which according to the respondents is
relatable to Section 4 of the Indian Telegraphic Act, 1988. Earlier, the entire
process of broadcasting was being done in an analogue mode. This is otherwise
called as "non addressable system". By this process, a single wire
would get attached to a TV set. It would carry number of channels in an
analogue mode. In this process, consumer/subscriber had no choice but to pick
all the channels. The broadcaster was also at a disadvantageous position. It was
virtually impossible to assess the number of subscribers. Many of the Local
Cable Television Operators (LCO) were allegedly withholding the information on
purpose. It also restrained launching of new channels due to capacity
constraints, as felt by Multi System Operators.

5.5. Due to the advancement in technology, addressable system came
into being. Being digital, it carries hundreds of channels. Apart from paving
way for new technologies, the digital platform as it stands today includes
Multi System Operator(MSO), Direct to Home(DTH), Head in the Sky(HITS) and
IPTV. This position is in vogue throughout the country except a small part of
this State due to an interim order of the Court stated to be in operation.

5.6. The relationship between a broadcaster and distributor is rather
unique. It is governed by downlinking guidelines, downlinking permission and
the proforma meant for an application for such permission. Accordingly, a
transmission of a broadcast can only be done through a distributor. A specific
percentage can be charged by the distributor for the services rendered. The
broadcaster is supposed to reveal the names of the distributors in the
application form itself. Therefore, there is a clear cut mechanism put in place between the
two service providers viz., broadcaster and distributor.

5.7. Under the interconnected regulations, a broadcaster must provide
its signal to every distributor on reasonable terms. These regulations are
founded on the principles of "must provide" and "non exclusion".
Accordingly, the broadcaster is duty bound to publish a Reference
Interconnected Offer (RIO) setting forth the technological and commercial
terms. The object of this regulation is to avoid discrimination and absolute
control by a broadcaster as against a distributor.

5.8. The broadcaster uplinks the signal of its channel either by using
its own Teleport or by leasing it. To be noted, the signals of the pay channels
are in encrypted form. Now, we have different categories of channels, such as,
Free to Air Channels, Pay Channels, Standard and High Definition Channels. A
broadcaster, after obtaining permission, gives its own equipment to the
distributor for downloading the signals. A distributor does the work of
unencrypting the encrypted signals of the broadcaster and thereafter, re-encrypts
it for transmission to the end user. These signals are said to have been communicated
to the end users/subscribers when they reach the set top box. This set top box
will be fixed at the place of the subscriber. Therefore, the process involves a chain of events before a signal reaches
the subscriber.

5.9. Atleast from the year 2004 onwards, the process of regulating
the broadcasting services under TRAI Act, leading to the present impugned
Regulations and the Tariff Order, started happening.

5.10. Accordingly, by the Tariff Order dated 01.10.2004, the ceiling
price of television channel was fixed. By the second amendment Order dated
01.12.2004, 7% increase on the television channel was made. Similarly, under
the third tariff order dated 31.08.2006, the price of the television channel
was capped at Rs.5/- (ceiling limit) apart from mandating the offering as
a-la-carte. Tariff orders have also been passed periodically increasing the
price of the television channels. Under 14th Amendment
dated 06.04.2015, the relationship of a-la-carte and bouquet was created. Thus,
one can say that seeds of Regulations and Tariff Order were sowed a decade ago,
continued and implemented periodically.

5.11. Before giving birth to the impugned Regulations and Tariff Order,
the fourth respondent undertook an exhaustive process by which the broadcasters
including the petitioners were asked to furnish their views. This elaborate
exercise could very well be seen in consultative process adopted through its
papers. This, together with the explanatory memorandums attached along with the
Regulations and Tariff Order would indicate the fair process adopted.
Objections and views were duly recorded and dealt with. To be noted, the petitioners
themselves insisted and agreed with some of the provisions but for the reasons
known proceeded to challenge before this Court.

5.12. Broadcasting service was excluded initially from the definition
of “Telecommunication Services” under Section 2(1)(k) of the TRAI Act, 1997.
The scope and ambit of the aforesaid enactment would be dealt with infra. Vide
Act 2/2000, a proviso was added thus permitting the Central Government to
notify any other services as Telecommunication Services. In pursuant to the
aforesaid proviso, a notification was issued by the Central Government in
S.O.44 (E) and 45 (E) dated 09.04.2001 by which broadcasting services was
notified as telecommunication services and TRAI was given an additional function
to specify standard norms and periodicity of revision of rates of pay channels
including interim measures. A fruitful recapitulation:-

"S.O. 44(E).--In exercise of the powers conferred by the proviso to clause (k)
of sub-section (1) of section 2 of the Telecom Regulatory Authority of India Act, 1997 (24 of
1997), the Central Government hereby notifies the broadcasting services and
cable services to be telecommunication service.

[Notification No. 39 issued
by Ministry of Communication and Information Technology dated 9 January 2004.
S.O. No. 44(E) issued by TRAI, vide F. No. 13-1/2004]" ORDER "S.O. 45(E).--In exercise of the
powers conferred by clause (d) of subclause (1) of section 11 of the Telecom Regulatory
Authority of India Act, 1997 (24 of 1997) (hereinafter referred to as the Act),
the Central Government hereby entrusts the following additional functions to
the Telecom Regulatory Authority of India, established under Sub-section (1) of
Section 3 of the Act, in respect of
broadcasting services and cable services, namely: (1) Without prejudice to the
provisions contained in clause (a) of subsection (1) of section 11 of the Act, to make
recommendation regarding -- (a) the terms and conditions on which the
'addressable systems' shall be provided to customers Explanation--For the
purposes of this clause, 'addressable system' with its grammatical variation, means
an electronic device or more than one electronic devices put in an integrated
system through which signals of cable television network can be sent in
encrypted or unencrypted form, which can be decoded by the device or devices at
the premises of the subscriber within the limits of authorisation made, on the choice
and request of such subscriber, by the cable operator for that purpose to the
subscriber.

(b) the parameters for
regulating maximum time for advertisements in pay channels as well as other
channels.

(2) Without prejudice to
the provisions of sub-section (2) of section 11 of the Act, also to specify standard norms for, and periodicity
of, revision of rates of pay channels, including interim measures.

Needless to state that the
petitioners have not put into challenge this notification.

5.13. One of the petitioners challenged the proviso to Section 2(1)(k)
of the TRAI Act, which inter alia led to the notification of Standing Order
44(E) and 45(E). In this connection, the other petitioner is the sister concern
having a common parent company.

Resultantly, the Tariff Order passed was also put into challenge.

Incidentally, another broadcaster has challenged Section 11(2) of
the Act as well. The challenge made was repelled by the Division Bench of the
Delhi High Court in STAR
INDIA PRIVATE LIMITED VS. TELECOM REGULATORY AUTHORITY OF INDIA AND OTHERS ((2008) 146 DLT
455 (DB)). While
holding that the petitioner is a service provider within the meaning of TRAI
Act, it was held that the tariff fixation under Section 11(2) of the Act is the
duty and thus within the competence of the TRAI. It is pertinent to note that
the Special Leave Petition filed by the petitioner was also dismissed by the Apex
Court holding that there was no merit in SLP No.23612-23613 of 2007.

5.14. The relationship between a broadcaster and the distributor through
the Reference Interconnected Offer (RIO) dictated by the regulations was
challenged before the Telecom Disputes Settlement and Appellate Tribunal, in
which, M/s Media Pro Enterprises India Private Limited was a party. It was
nothing but an aggregate of broadcasters including the one of the petitioners
herein, who has also been arrayed as fourth respondent. Here again, the
contention was rejected while reiterating the views of the Division Bench of
the Delhi High Court, referred supra. Once again the Special Leave Petition was
dismissed by the Apex Court.

5.15. The petitioner also filed a miscellaneous application in M.A. No.108 of 2009 in Petition No.172 of 2009 before the Tribunal
inter alia contending that it is a service provider under the TRAI Act. The finding
rendered by the Tribunal is as under:

“35. The fact that the
petitioner, as a provider of "Broadcasting Service", is a service
provider is beyond any dispute. Admittedly, the respondent is also a service
provider within the meaning of the provisions of the Act. The dispute herein
is, thus, between two service providers."

5.16. The petitioners were asked by the impugned
regulations and tariff order package and sell their pay channels, free to air channels,
High and Standard definition channels in a specified manner keeping in mind the
overall interest of all inclusive of the general public. Thus, through this
process, the petitioners are made to make their offers as a-la-carte and
bouquet channels. They are asked not to mix the pay channels and free to air
channels with each other. Therefore, the offer should either be a bouquet of free to air
channels or pay channels. Similarly, they are not supposed to offer in a bouquet,
both high definition and standard definition formats of the same channels. A
monetary cap was fixed on the bouquet of pay channels. The extent of discount
offer is also restricted to encourage the customer to effectively exercise its
choice to choose channel of their liking on an a-la-carte basis. Thus, the
impugned Regulations and the Tariff order make it mandatory for the
broadcasters to make their offers in a particular way. A deemed extension of
geographical territory was also provided in favour of the distribution under
certain circumstances. It is needless to state that the actual content of the programme
in a channel has never been touched.

5.17. These Regulations and Tariff Order are put into challenge by
the petitioners inter alia contending that they deal with “content” for which
there is no power available under the TRAI Act, which only deals with
“carriage”. The other contention is that the field is occupied by the Copyright
Act, 1957, by which, the broadcasters reproduction right has been recognised
and protected.

5.18. From the above, two principal issues crop up for determination:-

(1)
whether the impugned Regulations and the Tariff Order can exist and operate
through the powers conferred to and under the TRAI Act, 1997;

(2) Whether the
impugned Regulations and the Tariff Order would impinge upon the provisions of Copyright
Act, 1957.

5.19. There are other issues branch out from these two main issues
as noted supra. The issue as to whether “content” is involved as against
“carriage” can be answered only by answering the core issues framed. In other
words, answering the issues would amount to answering the issue qua the
“content”. It is to be noted that the word “content” is looked at differently
by both sides. The question as to whether the impugned Regulations and the
Tariff Order are valid in law or not has to be seen through the aforesaid
issues framed, on an analysis of provisions of the enactments and their
interpretation.

5.20. On the contrary, giving a factual finding without any legal basis
would create a serious impact on the provisions governing. It would amount to
deciding legal issues on the disputed questions of fact. After all, a legal
issue can only be decided on an admitted fact. The Regulations, the Tariff Order and their impact are admitted
facts. Therefore, the question for consideration is the availability of
power leading to their birth and legal bar, if any. It is also to be noted at
the cost of repetition that even the lead judgment as alluded to earlier, the petitioners
have agreed that they do not venture to go into the merits of the case. Thus,
the very existence of “content” as the petitioners seek to espouse would come
under the caption ”merit”. Packaging Channels may be a smart, prudent business
acumen, but then we are on the legality rather than the logic, reason and
object behind. Hence, it would be imperative to answer issues framed supra,
which were, in fact, dealt with in both judgments in their own ways.

6. PRINCIPLES:-

6.1. Before venturing further let us keep in mind the general principles
of law required to be applied in the case.

6.2. Judging a statute through "literal" to
"Hyden's Golden Rule" has gone through a circle. What is being
applied by the Courts today is on the reasonable, creative and Fair
Construction Principle. A liberal interpretation is required more in a social,
welfare legislation with the objective in mind.

6.3. LORD
DENNING:

“A Judge should ask himself the question (how).
If the makers of the Act had themselves come across this rule in the texture of
it, how would they have straightened it out? He must do so as they would have done.
A Judge must not alter the material on which (the Act) it is woven but he can
and should iron out the creases."

6.4. CRAIES
IN STATUTE LAW:

"... It is the duty of
Courts of justice to try to get at the real intention of the legislature by
carefully attending to the whole scope of the statute to be construed' .. that
in each case you must look to the subject-matter, consider the importance of
the provision and the relation of that provision to the general object intended
to be secured by the Act, and upon a review of the case in that aspect decide
whether the enactment is what is called imperative or only directory."

6.5. O LIVER WENDELL HOMES:

"It is sometimes more important to emphasise the obvious than
to elucidate the obscure."

6.6. A.DRIEDGER,
Construction of Statute(2nd Ed. 1983): The words
of an Act are to be read in their entire context and in their grammatical and
ordinary sense harmoniously with the Scheme of the Act, the object of the Act,
and the intention of Parliament.

6.7. The celebrated and often quoted words of Justice Chinnappa Reddy
in RESERVE BANK OF INDIA VS. PEERLESS GENERAL FINANCE AND INVESTMENT
COMPANY LIMITED AND OTHERS (1987 1 SCC 424), holds the field even today. Relevant
passage is apposite:

"51. Interpretation must
depend on the text and the context. They are the bases of interpretation. One
may well say if the text is the texture, context is what gives the colour.
Neither can be ignored. Both are important. That
interpretation is best which makes the textual interpretation match the
contextual. A statute is best interpreted when we know why it was enacted. With
this knowledge, the statute must be read, first as a whole and then section by
section, clause by clause, phrase by phrase and word by word. If a statute is looked at,
in the context of its enactment, with the glasses of the statute-maker,
provided by such context, its scheme, the sections, clauses, phrases and words
may take colour and appear different than when the statute is looked at without
the glasses provided by the context. With these glasses we must look at the Act
as a whole and discover what each section, each clause, each phrase and each
word is meant and designed to say as to fit into the scheme of the entire Act.
No part of a statute and no word of a statute can be construed in isolation.
Statutes have to be construed so that every word has a place and everything is
in its place."

6.8.
An entry in the List under the Seventh Schedule is the field of legislation.
Thus the power is derived only under Article 246 of the Constitution of India.
Such an entry has to be given widest amplitude of its power as against a narrow
and restricted one. A liberal construction of the words in an entry is the
rule. Hence legislative entries are to be interpreted broad and wide. However,
the general rule of interpretation also would apply by a combined reading of provisions,
objects and reasons put together as a whole.

"8.........The interpretation of the statute would apply to the interpretation
of the entries subject to reservation that their application is of necessity
conditioned by the subject-matter of the enactment itself. It should be
remembered that the problem before us is to construe a word appearing in Entry
45 which is a head of legislative power. It cannot be read in a narrow or
restricted sense and that each general word should be held to extend to all
ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended
to it. It is, therefore, clear that in construing an entry in a list conferring
legislative powers, the widest possible construction, according to their
ordinary meaning, must be put upon the words used therein. Reference to
legislative practice may be admissible for cutting down the meaning of a word
in order to reconcile two conflicting provisions in two legislative lists. The cardinal
rule of interpretation, however, is that words should be given their ordinary,
natural and grammatical meaning subject to the rider that in construing words
in a constitutional enactment, conferring legislative power under Article 246,
the most liberal construction should be put upon the words in the entries in
the respective lists in the Seventh Schedule so that the same may have effect
in their widest amplitude. The same principle was reiterated in Kunnathat Thathunni
Moopil Nair v. State of Kerala 1961 3 SCR 77 (SCR at p. 106) by Sarkar, J. though in a dissenting tone but
on this principle there is no dissent by majority and it cannot be dissented.
It was said thus:

“8. .....It is well known that entries in the legislative
lists have to be read as widely as possible. It is not necessary to cut down
the plain meaning of the word ‘land’ in Entry 49 to give full effect to the
word ‘forest’ in Entry 19. In my view, the two entries, namely, Entry 49 and
Entry 18 deal with entirely different matters. Therefore, under Entry 49 taxation
on land on which a forest stands is permissible and legal.”

9. In the case of Synthetics and Chemicals
Ltd. v. State of U.P 1990 1 SCC 109 a Bench of seven Judges of this Court considered
the effect of interpretation of the Constitution and legislative entries in
para 67 which reads as under: (SCC pp. 150-51)

“67. It is well to remember that the meaning of the expressions used
in the Constitution must be found from the language used. We should interpret
the words of the Constitution on the same principle of interpretation as one
applies to an ordinary law but these very principles of interpretation compel
one to take into account the nature and scope of the Act which requires
interpretation. A Constitution is the mechanism under which laws are to be made
and not merely an Act which declares what the law is to be. It is also well
settled that a Constitution must not be construed in any narrow or pedantic
sense and that construction which is most beneficial to the widest possible
amplitude of its power, must be adopted. An exclusionary clause in any of the
entries should be strictly and, therefore, narrowly construed. No entry should,
however, be so read as not (sic) to rob it of entire content. A broad and
liberal spirit should, therefore, inspire those whose duty it is to interpret
the Constitution, and the courts are not free to stretch or to pervert the
language of an enactment in the interest of any legal or constitutional theory.
Constitutional adjudication is not strengthened by such an attempt but it must
seek to declare the law but it must not try to give meaning on the theory of
what the law should be, but it must so look upon a Constitution that it is a
living and organic thing and must adapt itself to the changing situations and
pattern in which it has to be interpreted. It has also to be borne in mind that
where division of powers and jurisdiction in a federal Constitution is the
scheme, it is desirable to read the Constitution in harmonious way. It is also
necessary that in deciding whether any particular enactment is within the
purview of one legislature or the other, it is the pith and substance of the
legislation in question that has to be looked into. It is well settled that the
various entries in the three lists of the Indian Constitution are not powers
but fields of legislation. The power to legislate is given by Article 246 and
other articles of the Constitution. The three lists of the Seventh Schedule to
the Constitution are legislative heads of fields of legislation. These demarcate the area over which the appropriate legislatures can
operate. It is well settled that widest amplitude should be given to the
language of the entries in three Lists but some of these entries in different
lists or in the same list may override and sometimes may appear to be in direct
conflict with each other, then and then only comes the duty of the court to
find the true intent and purpose and to examine the particular legislation in
question. Each general word should be held to extend to all ancillary or
subsidiary matters which can fairly and reasonably be comprehended in it. In interpreting
an entry it would not be reasonable to import any limitation by comparing or
contrasting that entry with any other in the same list. It has to be
interpreted as the Constitution must be interpreted as an organic document in
the light of the experience gathered. In the constitutional scheme of division
of powers under the legislative lists, there are separate entries pertaining to
taxation and other laws. The aforesaid principles are fairly well settled by various
decisions of this Court and other courts. Some of these decisions have been
referred to in the decision of this Court in India Cement Ltd. v. State of T.N 1990 1 SCC
12”

10. In a recent judgment, this
Court, by a Bench of two Judges, to which K. Ramaswamy and G.P Pattanaik, JJ.
were members, in Indian Aluminium Co. v. State of Kerala 1996 7 SCC 637 considered
the same question in paras 12 and 20 which read as under: (SCC pp. 647 and 649)

“12. The primary question, therefore, is: Whether the impugned Act enacted by
the State Legislature is one under Entry 53 of the State List, viz., ‘Taxes on
the consumption or sale of electricity’. Indisputably, the title of the Act as
well as the charging Section 3 employ the words ‘duty on supply of electricity’.
Under article
246(3) of the constitution, every State legislature has explicit power to make law for that
State with respect to the matters enumerated in List II (State List) of the
Seventh Schedule to the Constitution. The State's power to impose tax is
derived from the Constitution. The entries in the three lists of the Seventh
Schedule are not power of legislation but merely fields of legislation. The
power is derived under Article 246 and other related articles of the
Constitution. The legislative fields are of enabling character designed to
define and delimit the respective areas of legislative competence of the respective
legislatures. There is neither implied restriction imposed on the legislature
nor is any duty prescribed to exercise that legislative power in a particular
manner. But the legislation must be subject to the limitations prescribed under
the Constitution.

20. When the vires of an enactment
is challenged, it is very difficult to ascertain the limits of the legislative
power. Therefore, the controversy must be resolved as far as possible, in
favour of the legislative body putting the most liberal construction upon the
relevant legislative entry so that it may have the widest amplitude. The court
is required to look at the substance of the legislation. It is an equally
settled law that in order to determine whether a tax statute is within the competence
of the legislature, it is necessary to determine the nature of the tax and
whether the legislature had power to enact such a law. The primary guidance for
this purpose is to be gathered from the charging section. It is the substance
of the impost and not the form that determines the nature of the tax.”

11. Thus, it is settled
principle of interpretation that legislative entries are required to be
interpreted broadly and widely so as to give powers to the legislature to enact
the law with respect to matters enumerated in the legislative entries.
Substantive power of the legislature to enact the law is under article 246 of the
constitution and legislative entries in the respective Lists I to III of the
Seventh Schedule are of enabling character, designed to define and de-limit the
respective areas of legislative competence of the respective legislatures, the
substantive power in Article 246 and all other related articles.”

7. CONFLICT OF ENACTMENTS:

7.1. When two enactments are stated
to be pitted against each other, a Court of law is required to adopt a
construction in harmony with both of them. A suspicion through a jaundiced eye
cannot be the approach. What is required to be seen is the object and
intentment of the legislations. They must be allowed to travel in their
respective channels. Even if the Channel is one, their respective waters are
not supposed to mix with each other. This principle would apply both for interpreting
a provision of law and provisions contained in two different enactments. A
conflict cannot be foreseen as against the presumption of validity of a
legislative exercise. Thus, the interpretation must depend upon the text and
the context. There is very limited difference between a purposive, reasonable,
creative and fair construction interpretation. One has to fall upon the object
and the reasons behind an enactment. The Court may sit in the armed chair of a
maker of the enactment and see through its eyes.

7.2. Interpretations of two enactments as stated above are to be made
on the settled legal principles. Thus, there is no presumption of one enactment
encroaching upon the other unless there is a clear inconsistency or repugnancy.
Therefore, the Court has to be satisfied that the provisions contained in both
the enactments sought to be impugned with respect to one of them are
irreconcilable and such inconsistency appears so apparent. In the absence of a
direct conflict or collision between the two enactments, one cannot be held as contrary
to the other. In such a case, even if there is an incidental overlapping, it
would not violate the provisions. Occasional vagaries do not matter much.

7.3. By a general principle, a special Act is to be given primacy over
a general one. However, this also has to be seen on the provisions governing
both enactments. There may be a case where General Act may have the substantive
provision as against the special one.

“27. Equally, Dr. Singhvi’s
argument that the Code leads to very drastic action
being taken once an application for insolvency is filed and admitted and that,
therefore, all conditions precedent must be strictly construed is also not in
sync with the recent trend of authorities as has been noticed by a concurring
judgment in Ms. Eera through Dr. Manjula Krippendorf v. State (Govt. of NCT of
Delhi) & Anr, Criminal Appeal Nos. 1217-1219 of 2017 decided on July 21,
2017. In this judgment, the correct interpretation of Section 2(1)(d) of the Protection of
Children from Sexual Offences Act, 2012 arose. After referring to the
celebrated Heydon’s case, 76 E.R. 637 [1584] and to the judgments in which the
golden rule of interpretation of statutes was set out, the concurring judgment
of R.F. Nariman, J., after an exhaustive survey of the relevant case law, came
to the conclusion that the modern trend of case law is that creative
interpretation is within the Lakshman Rekha of the Judiciary. Creative
interpretation is when the Court looks at both the literal language as well as
the purpose or object of the statute, in order to better determine what the
words used by the draftsman of the legislation mean. The concurring judgment
then concluded: (Eera case, SCC p.204, para 127).

“127. It is thus clear on
a reading of English, U.S., Australian and our own Supreme Court judgments that
the ‘Lakshman Rekhrea’ has in fact been extended to move away from the strictly
literal rule of interpretation back to the rule of the old English case of
Heydon, where the Court must have recourse to the purpose, object, text, and
context of a particular provision before arriving at a judicial result. In
fact, the wheel has turned full circle. It started out by the rule as stated in
1584 in Heydon’s case, which was then waylaid by the literal interpretation
rule laid down by the Privy Council and the House of Lords in the mid 1800s,
and has come back to restate the rule somewhat in terms of what was most felicitously
put over 400 years ago in Heydon’s case.”

28.
In dealing with penal statutes, the Court was
confronted with a body of case law which stated that as penal consequences
ensue, the provisions of such statutes should be strictly construed. Here
again, the modern trend in construing penal statutes has moved away from a
mechanical incantation of strict construction. Several judgments were referred
to and it was held that a purposive interpretation of such statutes is not
ruled out. Ultimately, it was held that a fair construction of penal statutes
based on purposive as well as literal interpretation is the correct modern day
approach.

29. However, Dr. Singhvi cited Raghunath Rai Bareja v.
Punjab National Bank, (2007) 2 SCC 230 and
relied upon paragraphs 39 to 47 for the proposition that the literal
construction of a statute is the only mode of interpretation when the statute
is clear and unambiguous. Paragraph 43 of the said judgment was relied upon
strongly by the learned counsel, which states:

“In other words, once we depart
from the literal rule, then any number of interpretations can be put to a
statutory provision, each judge having a free play to put his own
interpretation as he likes. This would be destructive
of judicial discipline, and also the basic principle in a democracy that it is
not for the Judge to legislate as that is the task of the elected
representatives of the people. Even if the literal interpretation results in
hardship or inconvenience, it has to be followed (see G.P. Singh's Principles
of Statutory Interpretations, 9th Edn., pp. 45-49). Hence departure from the literal
rule should only be done in very rare cases, and ordinarily there should be
judicial restraint in this connection.”

30. Regard being had to the modern trend of authorities referred to
in the concurring judgment in Ms. Eera through Dr. Manjula Krippendorf (supra),
we need not be afraid of each Judge having a free play to put forth his own interpretation
as he likes. Any arbitrary interpretation, as opposed to fair interpretation,
of a statute, keeping the object of the legislature in mind, would be outside
the judicial ken. The task of a Judge, when he looks at the literal language of
the statute as well as the object and purpose of the statute, is not to interpret
the provision as he likes but is to interpret the provision keeping in mind
Parliament’s language and the object that Parliament had in mind. With this
caveat, it is clear that judges are not knight-errants free to roam around in the
interpretative world doing as each Judge likes. They are bound by the text of the
statute, together with the context in which the statute is enacted; and both text
and context are Parliaments’, and not what the Judge thinks the statute has been
enacted for. Also, it is clear that for the reasons stated by us above, a fair construction
of Section 9(3)(c), in consonance with the
object sought to be achieved by the Code, would lead to the conclusion that it cannot be construed as a
threshold bar or a condition precedent as has been contended by Dr. Singhvi.............

43.The doctrine of harmonious
construction of a statute extends also to a harmonious construction of all
statutes made by Parliament. In Harshad S. Mehta v. State of
Maharashtra (2001) 8 SCC 257 at 280-81, the Special Court (Trial
of Offences Relating to Transactions in Securities) Act, 1992 was held, insofar as the criminal jurisdiction of the
Special Court was concerned, to be harmoniously construed with the Code of Criminal Procedure,1973
in the following terms:

“48. To our mind, the Special Court has all the powers
of a Court of Session and/or Magistrate, as the case may be, after the
prosecution is instituted or transferred before that Court. The width of the
power of the Special Court will be same whether trying such cases as are instituted
before it or transferred to it. The use of different words in Sections 6 and 7 of the Act as already noticed earlier also shows
that the words in Section 7 that the
prosecution for any offence shall be instituted only in the Special Court
deserve a liberal and wider construction. They confer on the Special Court all
powers of the Magistrate including the one at the stage of investigation or
inquiry.

Here, the institution of
the prosecution means taking any steps in respect thereof before the Special
Court. The scheme of the Act nowhere contemplates that it was intended that
steps at precognizance stage shall be taken before a court other than a Special
Court. We may note an illustration given by Mr Salve referring to Section 157
of the Code. Learned counsel submitted that the report under that section is
required to be sent to a Magistrate empowered to take cognizance of offence. In
relation to offence under the Act, the Magistrate has no power to take
cognizance. That power is exclusively with the Special Court and thus report
under Section 157 of the Code will have to be sent to the Special Court though
the section requires it to be sent to the Magistrate. It is clear that for the expression
“Magistrate” in Section 157, so far
as the Act is concerned, it is required to be read as “Special Court” and
likewise in respect of other provisions of the Code. If the expression “Special
Court” is read for the expression “Magistrate”, everything will fall in line.
This harmonious construction of the provisions of the Act and the Code makes
the Act work. That is what is required by principles of statutory
interpretation. Section 9(1) of the
Act provides that the Special Court shall in the trial of such cases follow the
procedure prescribed by the Code for the trial of warrant cases before the
Magistrate. The expression “trial” is not defined in the Act or the Code. For
the purpose of the Act, it has a wider connotation and also includes in it the
pre-trial stage as well.

Section 9(2) makes the Special Court, a Court of Session by a fiction by
providing that the Special Court shall be deemed to be a Court of Session and
shall have all the powers of a Court of Session.

In case, the Special Court
is held not to have the dual capacity and powers both of the Magistrate and the
Court of Session, depending upon the stage of the case, there will be a
complete hiatus. It is also to be kept in view that the Special Court under the
Act comprises of a High Court Judge and it is a court of exclusive jurisdiction
in respect of any offence as provided in Section 3(2) which will include offences under the
Indian Penal Code, the Prevention of Corruption
Act and other penal laws. It is only in the event of
inconsistency that the provisions of the Act would prevail as provided in Section 13 thereof. Any other
interpretation will make the provision of the Act unworkable which could not be
the intention of the legislature. Section 9(2) does not exclude Sections 306 to 308 of the Code from the
purview of the Act. This section rather provides that the provisions of the Code shall apply to the proceedings
before the Special Court. The inconsistency seems to be only imaginary. There
is nothing in the Act to show that Sections 306 to 308 were intended to be
excluded from the purview of the Act.”

44. Similarly, in CTO v. Binani Cements Ltd. (2014) 8 SCC 319 at 332, the rule of construction of two
Parliamentary statutes being harmoniously construed was laid down as follows:

“35.
Generally, the principle has found vast application in cases of there being two
statutes: general or specific with the latter treating the common
subject-matter more specifically or minutely than the former. Corpus Juris
Secundum, 82 C.J.S. Statutes § 482 states that when construing a general and a
specific statute pertaining to the same topic, it is necessary to consider the
statutes as consistent with one another and such statutes therefore should be
harmonised, if possible, with the objective of giving effect to a consistent legislative
policy. On the other hand, where a general statute and a specific statute
relating to the same subject-matter cannot be reconciled, the special or
specific statute ordinarily will control.

The provision more
specifically directed to the matter at issue prevails as an exception to or
qualification of the provision which is more general in nature, provided that
the specific or special statute clearly includes the matter in controversy
(Edmond v. United States [137 L Ed 2d 917 : 520 US 651 (1997)] , Warden v.
Marrero [41 L Ed 2d 383 : 417 US 653 (1974)] ).”

45. More recently, in Binoy Viswam v. Union of India (2017) 7
SCC 59 at 132, this Court construed the Income Tax Act, 1961 and the Aadhaar (Targeted Delivery of Financial and Other
Subsidies, Benefits and Services) Act, 2016 harmoniously in the following manner: “98. In view of the
above, we are not impressed by the contention of the petitioners that the two
enactments are contradictory with each other. A harmonious reading of the two
enactments would clearly suggest that whereas enrolment of Aadhaar is voluntary
when it comes to taking benefits of various welfare schemes even if it is
presumed that requirement of Section 7 of the Aadhaar Act that it is necessary
to provide Aadhaar number to avail the benefits of schemes and services, it is
up to a person to avail those benefits or not. On the other hand, purpose
behind enacting Section 139-AA of the
Act is to check a menace of black money as well as money laundering and also to
widen the income tax net so as to cover those persons who are evading the payment
of tax.”

48. In Central Bank of India v. State of Kerala (2009) 4 SCC 94 at 141-42, the non-obstante clauses contained in Section 34(1) of Recovery of Debts Due to
Banks and Financial Institutions Act, 1993 and Section 35 of the Securitisation
and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 were held not to
override specific provisions contained in the Bombay Sales Tax Act, 1959 and
the Kerala Sales Tax Act 1963 dealing with a declaration of a first charge in
the following terms:

“130. Undisputedly, the two enactments do not contain
provision similar to the Workmen's Compensation Act, etc. In the absence of any specific provision to that effect, it
is not possible to read any conflict or inconsistency or overlapping between
the provisions of the DRT Act and the Securitisation Act on the one hand and Section 38-C of the
Bombay Act and Section 26-B of the Kerala Act on the other and the non obstante
clauses contained in Section 34(1) of the DRT Act and Section 35 of the Securitisation Act cannot be
invoked for declaring that the first charge created under the State legislation
will not operate qua or affect the proceedings initiated by banks, financial
institutions and other secured creditors for recovery of their dues or
enforcement of security interest, as the case may be.

131. The Court could have given
effect to the non obstante clauses contained in Section
34(1) of the DRT Act and Section 35 of the Securitisation
Act vis-à-vis Section 38-C of the Bombay Act and Section 26-B of the Kerala Act
and similar other State legislations only if there was a specific provision in
the two enactments creating first charge in favour of the banks, financial
institutions and other secured creditors but as Parliament has not made any
such provision in either of the enactments, the first charge created by the
State legislations on the property of the dealer or any other person, liable to
pay sales tax, etc., cannot be destroyed by implication or inference,
notwithstanding the fact that banks, etc. fall in the category of secured
creditors.”

49. Since there is no clear disharmony between the two Parliamentary
statutes in the present case which cannot be resolved by harmonious
interpretation, it is clear that both statutes must be read together. Also, we
must not forget that Section 30 of the Advocates Act deals with the fundamental right under Article 19(1)(g) of the Constitution to
practice one’s profession. Therefore, a conjoint reading of Section 30 of the Advocates Act and Sections 8 and 9 of the Code together with the Adjudicatory
Authority Rules and Forms thereunder would yield the result that a notice sent
on behalf of an operational creditor by a lawyer would be in order.”

“This Court in solidaire
case approved the observations of the Special Court to the effect that if the
legislature confers a non-obstante clause on a later enactment, it means that
the legislature intends that the later enactment should prevail. Further, it is
a settled rule of interpretation that if one construction leads to a conflict,
whereas on another construction two Acts can be harmoniously construed, then
the latter must be adopted.”

8. PRESUMPTION: While holding that there is a presumption in favour of the legislation
qua the scope of both the enactments on the same subject matter, it was
accordingly held by the Supreme Court in KISHOREBHAI KHAMANCHAND GOYAL VS. STATE OF GUJARAT AND ANOTHER
((2003) 12 Supreme Court Cases 274) as:

6. There is presumption against a repeal by implication; and the
reason of this rule is based on the theory that the Legislature while enacting
a law has a complete knowledge of the existing laws on the same subject matter,
and therefore, when it does not provide a repealing provision, the intention is
clear not to repeal the existing legislation. (See: Municipal Council, Palai
through the Commissioner of Municipal Council, Palai vs.
I.J. Joseph 1963 AIR(SC) 1561 ), Northern India Caterers (Private) Ltd. and Anr. vs. State of
Punjab and Anr. 1967 AIR(SC) 1581 ), Municipal Corporation of Delhi vs. Shiv Shanker 1971 (1) SCC 442 ) and Ratan Lal Adukia and Anr.
vs. Union of India 1990 AIR(SC) 104 ). When
the new Act contains a repealing section mentioning the Acts which it expressly
repeals, the presumption against implied repeal of other laws is further
strengthened on the princile expressio unius (persone vel rei) est exclusio
alterius. (The express intention of one person or thing is the exclusion of
another) as illuminatingly stated in Garnett vs. Bradley [1878] 3 A.C. 944 (HL). The continuance of existing
legislation, in the absence of an express provision of repeal by implication
lies on the party asserting the same. The presumption is,
however, rebutted and a repeal is inferred by necessary implication when the
provisions of the later Act are so inconsistent with or repugnant to the
provisions of the earlier Act and that the two cannot stand together. But, if
the two can be read together and some implication can be made of the words in
the earlier Act, a repeal will not be inferred. (See: A.G. vs. Moore 1878 (3)
ExD 276, Ratanlal's case (supra) and R.S. Raghunath vs. State
of Karnataka and Anr. 1992 AIR(SC) 81 ).

7. The necessary questions to be asked are: (1) Whether there is
direct conflict between the two provisions- (2) Whether the Legislature
intended to lay down an exhaustive Code in respect of the subject-matter
replacing the earlier law; (3) Whether the two laws occupy the same field. (See: Pt. Rishikesh and Anr. vs. Salma Begum (Smt.) 1995 (4) SCC 718 ), and Shri A.B. Krishna &
Ors. vs. The State of Karnataka & Ors. 1998 (1) JT 613 ).

8. The doctrine of implied
repeal is based on the theory that the Legislature, which is presumed to know
the existing law, did not intend to create any confusion by retaining
conflicting provisions and, therefore, when the court applies the doctrine, it
does not more than give effect to the intention of the Legislature by examining
the scope and the object of the two enactments and by a comparison of their provisions.
The matter in each case is one of the construction and comparison of the two
statutes. The Court leans against implying a repeal, "unless two Acts are
so plainly repugnant to each other that effect cannot be given to both at the same
time, a repeal will not be implied, or that there is a necessary inconsistency in the two Acts
standing together." (See Craies on Statute Law,
Seventh Edition, page 366, with reference to Re: Berrey [1936] Ch. 274 ). To determine
whether a later statute repeals by implication an earlier, it is necessary to
scrutinize the terms and consider the true meaning and effect of the earlier
Act. Until this is done, it is impossible to ascertain whether any
inconsistency exists between the two enactments. The areas of operation of the
Act and the Establishments Act in question are different with wholly different aims and objects.
They operate in their respective fields and there is no impediment for their
existence side by side. (See State of M.P. vs.
Kedia Leather and Liquor Ltd. and Ors. ( 2003 (6) Supreme 213 ).

9. READING DOWN:

9.1. The doctrine of “reading down” has to be adopted on a contingency.
When the enactment is distinct and clear, such an exercise which might lead to
a judicial legislation shall not be undertaken. Thus, the Court should not take
the role of judicial craftsman unless the context otherwise requires. This is
also for the reason that there is a general presumption that a legislature does
not intend to exceed its jurisdiction.

9.2. In INDRA
DAS VS. STATE OF ASSAM ((2011) 3 Supreme Court Cases 380), the Apex Court has held that effort
should always be made by the Court to uphold the validity of the statute. While
doing so, the doctrine of reading down can also be adopted.

“27. Similarly, we are of the opinion that the provisions in various statutes
i.e. 3 (5) of TADA or Section 10 of the Unlawful Activities (Prevention) which on their plain
language make mere membership of a banned organization criminal have to be read
down and we have to depart from the literal rule of interpretation in such
cases, otherwise these provisions will become unconstitutional as violative of
Articles 19 and 21 of the Constitution. It is true that ordinarily we should
follow the literal rule of interpretation while construing a statutory
provision, but if the literal interpretation makes the provision
unconstitutional we can depart from it so that the provision becomes
constitutional.

28. As observed by this Court
in Government of Andhra
Pradesh vs. P. Laxmi Devi (supra) every effort should be made by the Court to try to uphold
the validity of the statute, as invalidating a statute is a grave step. Hence
we may sometimes have to read down a statute in order to make it
constitutional.”

10.
EXTERNAL AID:

There
is no difficulty in interpreting a parie materia provision through external
aid. However, such an exercise shall also be done on exceptional circumstances.
To be noted, it may be done on satisfying that both the enactments deal with
the same field.

11. LEGAL FICTION:

11.1. A legal fiction is a presumption of facts, which are necessary.
Therefore, law itself requires certain facts to be in existence though not
factually available. An interpretor is required to imagine certain facts. While
construing the provision involving legal fiction, the object and purpose of
such a fiction has to be seen, understood and applied. Such a presumption has
to be taken thereafter, to its logical conclusion.

11.2. RAJASTHAN STATE INDUSTRIAL DEVELOPMENT AND INVESTMENT
CORPORATION AND ANOTHER VS. DIAMOND & GEM DEVELOPMENT CORPORATION LIMITED
AND ANOTHER ((2013) 5 Supreme Court Cases 470).

“ VI. “As if” – Meaning of

26. The expression “as if”, is used to make one applicable in
respect of the other. The words "as if" create a legal fiction. By
it, when a person is "deemed to be" something, the only meaning
possible is that, while in reality he is not that something, but for the
purposes of the Act of legislature he is required to be treated that something,
and not otherwise. It is a well settled rule of interpretation that, in construing
the scope of a legal fiction, it would be proper and even necessary, to assume
all those facts on the basis of which alone, such fiction can operate. The
words “as if”, in fact show the distinction between two things and, such words
must be used only for a limited purpose. They further show that a legal fiction
must be limited to the purpose for which it was created. (Vide: Radhakissen Chamria &
Ors. v. Durga Prasad Chamria & Anr., AIR 1940 PC 167; Commr. of Income-tax, Delhi v. S. Teja Singh, AIR 1959 SC 352; Ram Kishore Sen &
Ors. v. Union of India & Ors., AIR 1966 SC 644; Sher Singh v. Union of India & Ors., AIR 1984 SC 200; State of Maharashtra v.
Laljit Rajshi Shah & Ors, AIR 2000 SC 937; Paramjeet Singh Patheja v. ICDS Ltd. AIR 2007 SC 168; and Commissioner of Income
Tax v. Willamson Financial Services & Ors. (2008) 2 SCC 202).

27. In East End Dwelling Co.
Ltd. v. Finsbury Borough Council, 1952 AC 109, this Court approved the approach
which stood adopted and followed persistently. It set out as under: “The
statute says that you must imagine a certain state of affairs; it does not say
that having done so, you must cause or permit your imagination to boggle when
it comes to the inevitable corollaries of that state of affairs".

28. In Industrial Supplies
Pvt. Ltd. & Anr. v. Union of India & Ors., AIR 1980 SC 1858, this Court observed as
follows:- "It is now axiomatic that when a legal fiction is incorporated in
a statute, the court has to ascertain for what purpose the fiction is created.
After ascertaining the purpose, full effect must be given to the statutory fiction
and it should be carried to its logical conclusion. The court has to assume all
the facts and consequences which are incidental or inevitable corollaries to
giving effect to the fiction. The legal effect of the words 'as if he were' in
the definition of owner in Section 3(n) of the Nationalisation Act read with Section 2(1) of the Mines Act is that
although the petitioners were not the owners, they being the contractors for
the working of the mine in question, were to be treated as such though, in
fact, they were not so." (Emphasis added)

29. The instant case is
required to be decided in the light of the aforesaid settled legal propositions.

12. SUBORDINATE LEGISLATION:

12.1. The law governing a challenge to the subordinate legislation
is well crystallised by the Courts. Thus, until and unless one finds lack of
competency, manifest arbitrariness, total and substantive unreasonableness,
such a legislation cannot be declared as ultra vires.

20. In State of Tamil Nadu v.
P. Krishnamoorthy, (2006) 4 SCC 517, this Court after adverting to the relevant
case law on the subject, laid down the parameters of judicial review of
subordinate legislation generally thus:-

“15.There is a presumption in favour of constitutionality or validity
of a subordinate legislation and the burden is upon him who attacks it to show
that it is invalid. It is also well recognised that a subordinate legislation
can be challenged under any of the following grounds:

(a) Lack of legislative
competence to make the subordinate legislation.

(b) Violation of fundamental rights guaranteed under the Constitution
of India.

(c) Violation of any provision of the Constitution of India.

(d) Failure to conform to the statute under which it is made or
exceeding the limits of authority conferred by the enabling Act.

(e) Repugnancy to the laws of the land, that is, any enactment.

(f) Manifest arbitrariness/unreasonableness (to an extent where
the court might well say that the legislature never intended to give authority
to make such rules).

16. The court considering the validity of a subordinate legislation, will
have to consider the nature, object and scheme of the enabling Act, and also
the area over which power has been delegated under the Act and then decide
whether the subordinate legislation conforms to the parent statute. Where a
rule is directly inconsistent with a mandatory provision of the statute, then,
of course, the task of the court is simple and easy. But where the contention
is that the inconsistency or non-conformity of the rule is not with reference
to any specific provision of the enabling Act, but with the object and scheme
of the parent Act, the court should proceed with caution before declaring
invalidity.” This case
involves the petitioner as well.

12.3. The aforesaid legal position has also been reiterated in a recent
judgment in SHAYARA BANO VS. UNION OF INDIA AND OTHERS (MINISTRY
OF WOMEN AND CHILD DEVLEOPMENT SECRETARY AND OTHERS((2017) 9 Supreme Court
Cases page 1).

13. PROVISO:

13.1. A proviso has to be read in harmony with the main one. It has
to be understood normally from the constructions of the main provision.

“26..........55. A proviso, as is well known, may serve different
purposes: (i) qualifying or excepting certain provisions from the main enactment;
(ii) it may entirely change the very concept or the intendment of the enactment
by insisting on certain mandatory conditions to be fulfillled in order to make
the enactment workable; (iii) it may be so embedded in the Act itself as to
become an integral part of the enactment and thus acquire the tenor and colour
of the substantive enactment itself; and (iv) it may be used merely to act as
an optional addendum to the enactment with the sole object of explaining the
real intendment of the statutory provision.

27. Mr. Shenoy, the learned Counsel for the Petitioner has contended
that a proviso may exist as an independent provision provided it does not make any
reference to the main body of the Section to which it stands attached.

He has further argued that such independent provisions may
derogate from the other provisions and if they are of subsequent vintage, then
even on the application of the maxim 'leges posteriores priores contrarias
abrogant' they would remain impervious or impregnable to attacks of being
struck down being ultra vires. His submission is that since the substantive
part of Section 2(1)(k) of TRAI Act clearly
contemplates broadcasting services the proviso cannot be construed as an
independent legislation and hence must be struck down. In the Rejoinder he has
relied on the decision of the Privy Council in James Winter v. Attorney General
of Victoria (1874-75) L.R.6 P.C. 378 and to the extracted paragraph from Dwarka Prasad v. Dwarka Das
Saraf : "We may mention in
fairness to Counsel that the following, among other decisions, were cited at
the Bar bearing on the uses of provisos in statutes: C.I.T. v. Indo-Mercantile
Bank Ltd. 1959 Supp. 2 SCR 256; Ram Narain Sons Ltd. v.
Asstt. C.S.T. ; Thompson v.
Dibdin 1912 AC 533; Rex v. Dibdin 1910 Pro Div 57 and Tahsildar Singh v. State
of U.P. 1959 Supp 2 SCR 875. The
law is trite. A proviso must be limited to the subject-matter of the enacting
clause. It is a settled rule of construction that a proviso must prima facie be
read and considered in relation to the principal matter to which it is a
proviso. It is not a separate or independent enactment. 'Words are dependent on
the principal enacting words, to which they are tacked as a proviso. They
cannot be read as divorced from their context' (1912 AC 544). If the rule of
construction is that prima facie a proviso should be limited in its operation
to the subject-matter of the enacting clause, the stand we have taken is sound.
To expand the enacting clause, inflated by the proviso, sins against the
fundamental rule of construction that a proviso must be considered in relation
to the principal matter to which it stands as a proviso. A proviso ordinarily
is but a proviso, although the golden rule is to read the whole section,
inclusive of the proviso, in such manner that they mutually throw light on each
other and result in a harmonious construction.

The proper course is to apply the broad general rule of
construction which is that a section or enactment must be construed as a whole,
each portion throwing light if need be on the rest.”

13.3. This legal statement is taken
due note of by the Division Bench of the Delhi High Court in the petitioners'
own case referred supra.

"The true
principle undoubtedly is, that the sound interpretation and meaning of the
statute, on a view of the enacting clause, saving clause, and proviso, taken
and construed together is to prevail."

14. SUBSTANTIVE
PROVISION:

A
substantive provision draws its power from the object of the Act. Thus its
words are to be construed as illustrative having substantive powers and
functions qua the intendment of the Act.

15. EJUSDEM GENERIS AND NOSCITUR A SOCIIS:

15.1. The principle of ejusdem generis has to be applied with caution. There has to be genus and
thus a specie. Noscitur
a sociis is the rule of
construction with reference to the words found in immediate action with them.
It is much wider than the rule of ejusdem generis. In fact, rule of ejusdem generis is one of the species of Noscitur a sociis. Here again, general rule of interpretation depending on the text
and context is required to be adopted at first. Thus, the words as used are to be understood as such before
applying the rule of Noscitur
a sociis.

“71. In State of Bombay v. Hospital Mazdoor Sabha, (AIR 1960 SC 610 =
(1960) 2 SCR 866), it has been held that it must be borne in mind that noscitur
a sociis is merely a rule of construction and it cannot prevail in cases where
it is clear that wider words have been deliberately used in order to make the
scope of the defined word correspondingly wider. It is only where the intention
of the legislature in associating wider words with words of narrower significance
is doubtful, or otherwise not clear that the said rule of construction can be
usefully applied. It can also be applied where the meaning of the words of
wider import is doubtful; but, where the object of the legislature in using
wider words is clear and free of ambiguity, the rule of construction in
question cannot be pressed into service.

72. In Bank of India v. Vijay Transport, (1988 Supp, SCC 47 = AIR 1988
SC 151), the Court was dealing with the contention that a literal
interpretation is not always the only interpretation of a provision in a
statute and the court has to look at the setting in which the words are used
and the circumstances in which the law came to be passed to decide whether
there is something implicit behind the words actually used which would control
the literal meaning of the words used. For the said purpose, reliance was
placed on R.L. Arora (2) v. State of Uttar Pradesh, ((1964) 6 SCR 784 = AIR
1964 SC 1230). Dealing with the said aspect, the Court has observed thus,
(Vijay Transport Case, Bank of India Vs. Vijay Transport, (1988 Supp SCC 47 = AIR
1988 SC 151). SCC p. 51, para 11)

“… 11...... It may be that in interpreting
the words of the provision of a statute, the setting in which such words are placed
may be taken into consideration, but that does not mean that even though the
words which are to be interpreted convey a clear meaning, still a different interpretation
or meaning should be given to them because of the setting. In other words,
while the setting of the words may sometimes be necessary for the
interpretation of the words of the statute, but that has not been ruled by this
Court to be the only and the surest method of interpretation. …”

73. The Constitution Bench, in
Godfrey Phillips India Ltd. and another v. State of U.P. and others, (2005) 2
SCC 515, while expressing its opinion on the aforesaid rule of construction,
opined: (SCC pp.550 and 551, paras 81 & 83)

“81. We are aware that the
maxim of noscitur a sociis may be a treacherous one unless the “societas” to which
the “socii” belong, are known. The risk may be present when there is no other
factor except contiguity to suggest the “societas”. But where there is, as
here, a term of wide denotation which is not free from ambiguity, the addition
of the words such as “including” is sufficiently indicative of the societas. As
we have said, the word “includes” in the present context indicates a commonality
or shared features or attributes of the including word with the included.

* * *

83. Hence on an
application of general principles of interpretation, we would hold that the
word “luxuries” in Entry 62 of List II means the activity of enjoyment of or indulgence
in that which is costly or which is generally recognised as being beyond the
necessary requirements of an average member of society and not articles of
luxury.”

74. At this
juncture, we may note that in Ahmedabad (P) Primary Teachers’ Assn. v.
Administrative Officer, ((2004) 1 SCC 755= 2004 SCC (L&S) 306), it has been
stated that noscitur a sociis is a legitimate rule of construction to construe
the words in an Act of Parliament with reference to the words found in
immediate connection with them. In this regard, we may refer to a passage from
Justice G.P. Singh, Principles of Statutory Interpretation, (13th Edn., 2012)
509, where the learned author has referred to the lucid explanation given by
Gajendragadkar, J. We think it appropriate to reproduce the passage:- “It is a
rule wider than the rule of ejusdem generis; rather the latter rule is only an
application of the former. The rule has been lucidly explained by GAJENDRAGADKAR,
J. in the following words: “This rule, according to MAXWELL, Interpretation of
Statutes (11th Edn., 1962) 321, means that when two or more words which are
susceptible of analogous meaning are coupled together, they are understood to
be used in their cognate sense. They take as it were their colour from each other,
that is, the more general is restricted to a sense analogous to a less
general.” The learned author on further discussion has expressed the view that
meaning of a word is to be judged from the company it keeps, i.e., reference to
words found in immediate connection with them. It applies when two or more
words are susceptible of analogous meanings are coupled together, to be read
and understood in their cognate sense.(Principles of Statutory Interpretation
by G.P.Singh (8th Edn.) 379. Noscitur a soccis is merely a rule of construction
and cannot prevail where it is clear that wider and diverse etymology is
intentionally and deliberately used in the provision. It is only when and where
the intention of the legislature in associating wider words with words of narrowest
significance is doubtful or otherwise not clear, that the rule of noscitur a
soccis is useful.

75. The core issue is whether the said doctrine of noscitur a soccis should
be applied to the expression “incitement of an offence” used in Article 19(2)
of the Constitution so that it gets associated with the term “defamation”. The
term “defamation” as used is absolutely clear and unambiguous. The meaning is
beyond doubt. The said term was there at the time of commencement of the
Constitution. If the word “defamation” is associated or is interpreted to take
colour from the terms “incitement to an offence”, it would unnecessarily make
it a restricted one which even the founding fathers did not intend to do.
Keeping in view the aid that one may take from the Constituent Assembly Debates
and regard being had to the clarity of expression, we are of the considered
opinion that there is no warrant to apply the principle of noscitur a sociis to
give a restricted meaning to the term “defamation” that it only includes a
criminal action if it gives rise to incitement to constitute an offence. The
word “incitement” has to be understood in the context of freedom of speech and
expression and reasonable restriction. The word “incitement” in criminal
jurisprudence has a different meaning. It is difficult to accede
to the submission that defamation can only get criminality if it incites to
make an offence. The word “defamation” has its own independent identity and it
stands alone and the law relating to defamation has to be understood as it
stood at the time when the Constitution came into force.

76. The submission is that Sections 499 and 500 IPC are not confined
to defamation of the State or its components but include defamation of any
private person by another private person totally unconnected with the State. In
essence, the proponement is that the defamation of an individual by another
individual can be a civil wrong but it cannot be made a crime in the name of
fundamental right as protection of private rights qua private individuals
cannot be conferred the status of fundamental rights. If, argued the learned counsel,
such a pedestal is given, it would be outside the purview of Part III of the
Constitution and run counter to Articles 14, 19 and 21 of the Constitution. It
is urged that defamation of a private person by another person is unconnected
with the fundamental right conferred in public interest by Article 19(1) (a);
and a fundamental right is enforceable against the State but cannot be invoked
to serve a private interest of an individual. Elucidating the same, it has been
propounded that defamation of a private person by another person cannot be
regarded as a ‘crime’ under the constitutional framework and hence, what is
permissible is the civil wrong and the remedy under the civil law. Section 499
IPC, which stipulates defamation of a private person by another individual, has
no nexus with the fundamental right conferred under Article 19(1)(a) of the
Constitution, for Article 19(2) is meant to include the public interest and not
that of an individual and, therefore, the said constitutional provision cannot
be the source of criminal defamation. This argument is built up on two grounds:
(i) the common thread that runs through the various grounds engrafted under
Article 19(2) is relatable to the protection of the interest of the State and
the public in general and the word “defamation” has to be understood in the
said context, and (ii) the principle of noscitur a sociis, when applied,
“defamation” remotely cannot assume the character of public interest or
interest of the crime inasmuch a crime remotely has nothing to do with the same.

77. We have already stated about the doctrine of noscitur a sociis with
regard to ‘incitement of an offence’. Mr. Rao, learned senior counsel, has
emphasized on public interest relying on the said principle and in that context
has commended us to the decisions in K. Bhagirathi G. Shenoy and others v. K.P. Ballakuraya, (1999) 4 SCC
135 and RBI v. Peerless General Finance and Investment Co. Ltd., (1987) 1 SCC
424.”

16. APPROBATE AND
REPROBATE:

16.1.
While dealing with the relief sought for by a party, who approaches the Court,
the conduct plays a pivotal role. A party shall not be allowed to blow hot and
cold and thus, approbate and reprobate. This is based upon the principle of
estoppel, subject to limitation of the good conscience and right.

16.2. Similarly, in the case of RAJASTHAN STATE
INDUSTRIAL CORPORATION referred supra, the principle governing the doctrine of approbate
and reprobate has been dealt with, which is as under:

“ I. Approbate and Reprobate

15. A party cannot be permitted
to “blow hot-blow cold”, “fast and loose” or “approbate and reprobate”. Where
one knowingly accepts the benefits of a contract, or conveyance, or of an order,
he is estopped from denying the validity of, or the binding effect of such
contract, or conveyance, or order upon himself. This rule is applied to ensure
equity, however, it must not be applied in such a manner, so as to violate the
principles of, what is right and, of good conscience. (Vide: Nagubai Ammal & Ors. v. B. Shama Rao & Ors., AIR 1956 SC 593; C.I.T. Madras v. Mr. P.
Firm Muar, AIR
1965 SC 1216; Ramesh Chandra Pradeep Oil Corporation v. Municipal Corporation of Delhi & AnrSankla etc. v. Vikram Cement
etc., AIR 2009 SC 713; ., AIR 2011 SC 1869; Cauvery Coffee Traders, Mangalore v. Hornor Resources
(International) Company Limited, (2011) 10 SCC 420; and V. Chandrasekaran & Anr. v. The Administrative Officer &
Ors., JT 2012 (9)
SC 260).

16. Thus, it is evident that the doctrine of election is based on the
rule of estoppel- the principle that one cannot approbate and reprobate is
inherent in it. The doctrine of estoppel by election is one among the species
of estoppels in pais (or equitable estoppel), which is a rule of equity. By
this law, a person may be precluded, by way of his actions, or conduct, or silence
when it is his duty to speak, from asserting a right which he would have
otherwise had.”

17.
TRAI ACT, 1997:

17.1.
A regulated regime came into being through the creation of a sector specific
enactment viz., The Telecom Regulatory Authority of India Act, 1997 (Act 24 of
1997). It can be said, this Act is a creation of a judgment of the Apex Court
in SECRETARY, MINISTRY OF INFORMATION & BROADCASTING, GOVT. OF
INDIA AND OTHERS V. CRICKET ASOCIATION OF BENGAL AND OTHERS ((1995) 2 Supreme
Court Cases 161).
In this celebrated judgment, the pressing need to create a comprehensive
enactment regulating the airwaves or frequencies being public properties was
felt and emphasized. So also the overwhelming public interest to create a level
playing field, avoid monopoly, regulate the service providers and the usage of frequencies,
airwaves, content of the programmes and to sustain, promote and improve the
quality. Accordingly, a direction was issued to the Government of India to
formulate a comprehensive enactment after noting the inadequacies inherent in
the Indian Telegraphic Act, 1885. The following are the important passages.

"55............The-right to telecast/broadcast has certain inherent limitations
imposed by nature, whereas Article 19(2) applies to restrictions imposed by the State. The object of
licensing is not to cast restrictions on the expression of ideas, but to
regulate and Marshall scarce resources to ensure their optimum enjoyment by all
including those who are not affluent enough to dominate the media.

57..............The right of viewer can only be safeguarded by the regulatory
agency by controlling the frequencies of broadcast as it is otherwise
impossible for viewers to exercise their right to free speech qua the
electronic media in any meaningful way.

78. There is no doubt that since the airwaves/frequencies are a public
property and are also limited, they have to be used in the best interest of the
society and this can be done either by a central authority by establishing its
own broadcasting network or regulating the grant of licences to other agencies,
including the private agencies. What is further, the electronic media is the most
powerful media both because of its audio-visual impact, and its widest reach
covering the section of the society where the print media does not reach. The
right to use the airwaves and the content of the programmes therefore, needs
regulation for balancing it and as well as to prevent monopoly of information
and views relayed, which is a potential danger flowing from the concentration
of the right to broadcast/telecast in the hands either of a central agency or
of few private affluent broadcasters. That is why the need to have a central
agency representative of all sections of the society free from control both of
the Government and the dominant influential sections of the society.

82.The fourth contention is that, as held by the US Supreme Court,
the freedom of speech has to be viewed also as a right of the viewers which has
a paramount importance, and the said View has significance in a country like
ours. To safeguard the rights of the viewers in this country, it is necessary
to regulate and restrict the right to access to telecasting. There cannot be any
dispute with this proposition. We have in fact referred to this right of the
viewers in another context earlier. True democracy cannot exist unless all
citizens have a right to participate in the affairs of the polity of the
country. The right to participate in the affairs of the country is meaningless
unless the citizens are well informed on all sides of the issues, in respect of
which they are called upon to express their views.

One-sided information, disinformation, misinformation and non-information
all equally create an uninformed citizenry which makes democracy a farce when
medium of information is monopolised either by a partisan central authority or
by private individuals or oligarchic organisations. This is particularly so in
a country like ours where about 65 per cent of the population is illiterate and
hardly 1-1/2 per cent of the population has an access to the print media which
is not subject to precensorship. When, therefore, the electronic media is controlled
by one central agency or few private agencies of the rich, there is a need to
have a central agency, as stated earlier, representing all sections of the
society. Hence to have a representative central agency to ensure the viewers'
right to be informed adequately and truthfully is a part of the right of the viewers
under Article 19 [1] (a).

120...........Hence every citizen has a
right to use the best means available for the purpose. At present, electronic
media, viz., T.V. and radio, is the most effective means of communication. .............

122.We, therefore, hold as follows:

[i] The airwaves or frequencies
are a public property. Their use has to be controlled and regulated by a public
authority in the interests of the public and to prevent the invasion of their rights.
Since the electronic media involves the use of the airwaves, this factor
creates an in- built restriction on its use as in the case of any other public
property.

[ii] The right to impart and receive information is a species of the
right of freethe best means of imparting and receiving information and as such
to have an access to telecasting for the purpose. However, this right to have
an access to telecasting has limitations on account of the use of the public
property, viz., the airwaves, involved in the exercise of the right and can be
controlled and regulated by the public authority. This limitation imposed by the
nature of the public property involved in the use of the electronic media is in
addition to the restrictions imposed on the right to freedom of speech and
expression under Article 19 [2] of the Constitution.

[iii] The Central Government shall take immediate steps to establish
an independent autonomous public authority representative of all sections and
interests in the society to control and regulate the use of the airwaves. [iv]
Since the matches have been telecast pursuant to the impugned order of the High
Court, it is not necessary to decide the correctness of the said order..........

194....Airwaves, being public property must be utilised to advance
public good. Public good lies in ensuring plurality of opinions, views and
ideas and that would scarcely be served by private broadcasters, who would be
and who are bound to be actuated by profit motive. .......

To repeat, airwaves are public property and better remain in public
hands in the interest of the very freedom of speech and expression of the
citizens of this country.

200...........The fact remains that private broadcasting, even if allowed,
should not be left to market forces, in the interest of ensuring that a wide
variety of voices enjoy access to it.

201(b)(b)Airwaves constitute public property and must be utilised for
advancing public good. No individual has a right to utilise them at his choice
and pleasure and for purposes of his choice including profit...............

(c)Broadcasting media is inherently different from Press or other
means of communication/information. The analogy of press is misleading and
inappropriate. This is also the view expressed by several Constitutional Courts
including that of the United States of America.

4. The Indian Telegraph Act, 1885 is totally
inadequate to govern an important medium like the radio and television, i.e., broadcasting
media. The Act was intended for an
altogether different purpose when it was enacted. This is the result of the law
in this country not keeping pace with the technological advances in the field
of information and communications.

While all the leading democratic countries have enacted laws specifically
governing the broadcasting media, the law in this country has stood still,
rooted in the Telegraph
Act of 1885.

Except Section 4(1) and the definition of telegraph, no other provision of the Act is
shown to have any relevance to broadcasting media. It is, therefore, imperative
that the parliament makes a law placing the broadcasting media in the hands of
a public/statutory corporate or the corporations, as the case may be. This is
necessary to safeguard the interests of public and the interests of law as also
to avoid uncertainty, confusion and consequent litigation."

17.2. Accordingly, a decision was
made by the promulgation of an ordinance leading to the deliverance of the
Telecom Regulatory Authority of India Act, 1997. Some of the provisions of the
ordinance were taken note of by the Apex Court in DELHI
SCIENCE FORUM VS. UNION OF INDIA ((1996) 2 Supreme
Court Cases 405).

"31.......The existence of a Telecom Regulatory Authority with the
appropriate powers is essential for introduction of plurality in the Telecom
Sector. The National Telecom Policy is a historic departure from the practice
followed during the past century. Since the private sector will have to contribute
more to the development of the telecom network than DOT/MTNL in the next few
years, the role of an independent Telecom Regulatory Authority with appropriate
powers need not be impressed, which can harness the individual appetite for
private gains, for social ends. The Central Government and the Telecom
Regulatory Authority have not to behave like sleeping trustees, but have to function
as active trustees for the public good."

Thus, the Act came into existence in the year 1997. It is
imperative to point out that several experts in different fields including
eminent legal personalities took part in the process.

17.3. The preamble of the Act 24 of 1997 is as under.

" An Act to provide for the establishment of the1 [Telecom Regulatory
Authority of India and the Telecom Disputes Settlement and Appellate Tribunal
to regulate the telecommunication services, adjudicate disputes, dispose of appeals
and to protect the interests of service providers and consumers of the telecom
sector, to promote and ensure orderly growth of the telecom sector,] and for
matters connected therewith or incidental thereto."

A reading of the aforesaid would
clearly show that the object was to regulate the telecommunication services, to
protect the interest of service providers, such as, broadcasters, distributors
etc., along with the consumers, who are otherwise called as subscribers and to promote
orderly growth. The preamble also gives additional
powers to deal with matters connected and incidental to the object. Hence,
there is no doubt that the Act in its sweep takes care of many factors. Thus, the Act was introduced in exercise of the power under
Article 246 of the Constitution of India over a subject coming under Entry 31 of
List 1 of the VII Schedule.

17.4. The word "regulate" as adumbrated in the preamble assumes
greater importance in relation to the subject sought to be dealt with. A
restrictive and rigid meaning shall not be given to the word
"regulate". Otherwise, the very object and intendment of the Act would
be at peril. BHARAT SANCHAR NIGAM LIMITED VS. TELECOM REGULATORY
AUTHORITY OF INDIA AND OTHERS ((2014) 3 Supreme Court Cases 222).

"81.The terms ‘regulate’ and ‘regulation’ have been interpreted in large
number of judgments. We may notice few of them. In V.S. Rice & Oil Mills v. State of A.P. AIR 1964 SC 1781,
agreements for a period of ten years had been executed for supply of
electricity and the same did not contain any provision authorising the
Government to increase the rates during their operation. However, in exercise
of power under Section 3(1) of the Madras Essential Articles Control and
Requisitioning (Temporary Powers) Act, 1949, the State Government issued order
enhancing the agreed rates. The same was challenged on the ground that any
increase in agreed tariff was out of the purview of Section 3(1). Chief Justice
Gajendragadkar, speaking for the Constitution Bench, observed as under: “The
word regulate is wide enough to confer power on the State to regulate either by
increasing the rate, or decreasing the rate, the test being what is it that is necessary
or expedient to be done to maintain, increase, or secure supply of the
essential articles in question and to arrange for its equitable distribution
and its availability at fair prices. The concept of fair prices to which Section 3(1) expressly refers does not
mean that the price once fixed must either remain stationary, or must be reduced
in order to attract the power to regulate. The power to regulate can be
exercised for ensuring the payment of a fair price, and the fixation of a fair
price would inevitably depend upon a consideration of all relevant and economic
factors which contribute to the determination of such a fair price. If the fair
price indicated on a dispassionate consideration of all relevant factors turns
out to be higher than the price fixed and prevailing, then the power to regulate
the price must necessarily include the power to increase so as to make it fair.
Hence the challenge to the validity of orders increasing the agreed tariff rate
on the ground that they are outside the purview of Section 3(1) cannot be sustained.”

82. In State of Tamil Nadu v.
Hind Stone (1981) 2
SCC 205, this Court held that the word ‘regulate’ must be interpreted to
include ‘prohibition’ within its fold. Some of the observations made in that judgment
(paragraph10) are extracted below: “We do not think that ‘regulation’ has that
rigidity of meaning as never to take in ‘prohibition’. Much depends on the
context in which the expression is used in the statute and the object sought to
be achieved by the contemplated regulation. It was observed by Mathew, J. in G.K. Krishnan v. State of
T.N. (1975) 1 SCC 375: ‘The
word “regulation” has no fixed connotation. Its meaning differs according to the
nature of the thing to which it is applied.’ In modern statutes concerned as
they are with economic and social activities, ‘regulation’ must, of necessity,
receive so wide an interpretation that in certain situations, it must exclude competition
to the public sector from the private sector.

More so in a welfare State. It was pointed out by the Privy Council
in Commonwealth of Australia v. Bank of New South Wales (1949) 2 All ER — and
we agree with what was stated therein — that the problem whether an enactment
was regulatory or something more or whether a restriction was direct or only
remote or only incidental involved, not so much legal as political, social or
economic consideration and that it could not be laid down that in no circumstances
could the exclusion of competition so as to create a monopoly, either in a
State or Commonwealth agency, be justified. Each case, it was said, must be
judged on its own facts and in its own setting of time and circumstances and it
might be that in regard to some economic activities and at some stage of social
development, prohibition with a view to State monopoly was the only practical
and reasonable manner of regulation.

The statute with which we are concerned, the Mines and Minerals
(Regulation and Development) Act, is aimed, as we have already said more than once, at the
conservation and the prudent and discriminating exploitation of minerals.
Surely, in the case of a scarce mineral, to permit exploitation by the State or
its agency and to prohibit exploitation by private agencies is the most
effective method of conservation and prudent exploitation. If you want to
conserve for the future, you must prohibit in the present. We have no doubt
that the prohibiting of leases in certain cases is part of the regulation
contemplated by Section 15 of the Act.”

83. In K. Ramanathan v. State of Tamil Nadu (1985) 2 SCC 116, this Court
interpreted the word ‘regulation’ appearing in Section 3(2)(d) of the Essential Commodities Act, 1955 and
observed: “The word “regulation” cannot have any rigid or inflexible meaning as
to exclude “prohibition”. The word “regulate” is difficult to define as having
any precise meaning. It is a word of broad import, having a broad meaning, and
is very comprehensive in scope. There is a diversity of opinion as to its meaning
and its application to a particular state of facts, some courts giving to the
term a somewhat restricted, and others giving to it a liberal, construction.
The different shades of meaning are brought out in Corpus Juris Secundum, Vol.
76 at p. 611:

“‘Regulate’ is variously defined as meaning to adjust; to adjust,
order, or govern by rule, method, or established mode; to adjust or control by
rule, method, or established mode, or governing principles or laws; to govern;
to govern by rule; to govern by, or subject to, certain rules or restrictions;
to govern or direct according to rule; to control, govern, or direct by rule or
regulations.

‘Regulate’ is also defined as meaning to direct; to direct by rule
or restriction; to direct or manage according to certain standards, laws, or
rules; to rule; to conduct; to fix or establish; to restrain; to restrict.” See
also: Webster’s Third New International Dictionary, Vol. II, p. 1913 and
Shorter Oxford Dictionary, Vol. II, 3rd Edn., p. 1784.

It has often been said that the power to regulate does not necessarily
include the power to prohibit, and ordinarily the word “regulate” is not
synonymous with the word “prohibit”.

This is true in a general sense and in the sense that mere regulation
is not the same as absolute prohibition. At the same time, the power to
regulate carries with it full power over the thing subject to regulation and in
absence of restrictive words, the power must be regarded as plenary over the
entire subject. It implies the power to rule, direct and control, and involves
the adoption of a rule or guiding principle to be followed, or the making of a
rule with respect to the subject to be regulated. The power to regulate implies
the power to check and may imply the power to prohibit under certain
circumstances, as where the best or only efficacious regulation consists of
suppression. It would therefore appear that the word “regulation” cannot have any
inflexible meaning as to exclude “prohibition”. It has different shades of
meaning and must take its colour from the context in which it is used having
regard to the purpose and object of the legislation, and the Court must
necessarily keep in view the mischief which the legislature seeks to remedy.

The question essentially is one of degree and it is impossible to fix
any definite point at which “regulation” ends and “prohibition” begins. We may
illustrate how different minds have differently reacted as to the meaning of
the word “regulate” depending on the context in which it is used and the purpose
and object of the legislation. In Slattery v. Nalyor LR (1888) 13 AC 446 the
question arose before the Judicial Committee of the Privy Council whether a
Bye-law by reason of its prohibiting internment altogether in a particular
cemetery, was ultra vires because the Municipal Council had only power of
regulating internments whereas the Bye-law totally prohibited them in the
cemetery in question, and it was said by Lord Hobhouse, delivering the judgment
of the Privy Council: “A rule or Bye-law cannot be Held as ultra vires merely because
it prohibits where empowered to regulate, as regulation often involved
prohibition.”

84. In Jiyajeerao Cotton Mills Ltd. v. M.P. Electricity Board 1989 Supp (2) SCC 52, the
validity of the orders providing for higher charges/tariff for electricity
consumed beyond legally fixed limit was upheld in view of Section 22(b) of the Electricity Act,
which permits the State Government to issue an appropriate order for regulating
the supply, distribution and consumption of electricity. It was held that the
Court while interpreting the expression “regulate” must necessarily keep in
view the object to be achieved and the mischief sought to be remedied. The
necessity for issuing the orders arose out of the scarcity of electricity
available to the Board for supplying to its customers and, therefore, in this
background the demand for higher charges/tariff was held to be a part of a
regulatory measure.

85. In Deepak Theatre v. State of Punjab 1992 Supp (1) SCC 684, this
Court upheld classification of seats and fixation of rates of admission
according to the paying capacity of a cinegoer by observing that the same is an
integral part of the power to make regulation and fixation of rates of
admission became a legitimate ancillary or incidental power in furtherance of
the regulation under the Act.

86. The term ‘regulation’ was also interpreted in Quarry Owners’ Association v. State of
Bihar (2000) 8 SCC 655 in the context
of the provisions contained in the Mines and Minerals (Regulation Development) Act, 1957 and it was held: “Returning
to the present case we find that the words “regulation of mines and mineral
development” are incorporated both in the Preamble and the Statement of Objects
and Reasons of this Act. Before that we find that the Preamble of our
Constitution in unequivocal words expresses to secure for our citizens social,
economic and political justice. It is in this background and in the context of
the provisions of the Act, we have to give the meaning of the word
“regulation”. The word “regulation” may have a different meaning in a different
context but considering it in relation to the economic and social activities
including the development and excavation of mines, ecological and environmental
factors including States’ contribution in developing, manning and controlling
such activities, including parting with its wealth, viz., the minerals, the
fixation of the rate of royalties would also be included within its meaning.”

87. Reference in this
connection can also be made to the judgment in U.P. Coop. Cane Unions Federation v. West U.P.
Sugar Mills Association (2004) 5 SCC 430. In that case, the Court interpreted the word
‘regulation’ appearing in U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 and observed: “
Regulate” means to control or to adjust by rule or to subject to governing
principles. It is a word of broad impact having wide meaning comprehending all
facets not only specifically enumerated in the Act, but also embraces within
its fold the powers incidental to the regulation envisaged in good faith and its
meaning has to be ascertained in the context in which it has been used and the
purpose of the statute.”

88. It is thus evident that the term ‘regulate’ is elastic enough to include
the power to issue directions or to make regulations and the mere fact that the
expression “as may be provided in the regulations” appearing in clauses (vii)
and (viii) of Section
11(1)(b) has not
been used in other clauses of that sub-section does not mean that the regulations
cannot be framed under Section 36(1) on the subjects specified in clauses (i) to (vi) of Section 11(1)(b). In fact, by framing regulations
under Section 36, the Authority can
facilitate the exercise of functions under various clauses of Section 11(1)(b) including clauses (i) to
(vi)."

17.5. Of the
different players involved, who could be divided into two groups, namely
service providers and the customers, the latter's interest would certainly have
primacy being the general public. This was already dealt with in the judgment
of the Apex Court referred supra in SECRETARY OF MINISTRY OF
INFORMATION AND BROADCASTING VS. CRICKET ASSOCIATION OF BENGAL ((1995) 2 Supreme
Court Cases 161). It was also reiterated in the
subsequent decision in STAR INDIA PRIVATE LIMITED VS.
TELECOM REGULATORY AUTHORITY OF INDIA AND OTHERS ((2008) 146 DLT 455 (DB)). The aforesaid position has been dealt with in specific terms. The following
passage would be apposite.

"53.............What must not
be overlooked is that the subscriber has a fundamental right of viewership
which has pre-eminence over that of the broadcasters' fundamental rights. The
impugned Regulations are calculated to protect the viewers' interest."

"22.We have clearly stated
that it is not for this Court to examine the merit or otherwise of such policy
and regulatory matters which have been determined by expert bodies having
possessing requisite technical knowhow and are statutory in nature. However,
the Court would step in and direct the technical bodies to consider the matter
in accordance with law, while ensuring that public interest
is safeguarded and arbitrary decisions do
not prevail." (emphasis supplied)

Therefore, if one sees the preamble along with the statement of
object and reasons it is clear that the intention was to make provisions regulating
the services to meet the customers demand at a reasonable price. Hence, the
paramount interest is that of the consumer, who should be given the choice to
select a channel on a level playing ground. Two amendments were made in the
year 2000 and 2004. Once the Act is understood as a social, welfare one, a liberal
approach has to be adopted in tune with the objects meant to be achieved. We are
particularly concerned with Section 11, which
would be dealt with at a later point of time. Suffice it is to state that the
Act is meant to regulate a large number of activities. It is also to be noted
that no such regulation like the impugned one and the tariff order can ever be made
under any other enactment including The Copyright Act, 1957.

17.7. Section 2 of the Telecom Regulatory Authority of India Act,
1997 deals with definitions. It opens with the words “unless context otherwise
requires”. Therefore, the words mentioned therein are to be given their natural
meaning in tune with the object enshrined. Section 2(e) of the Act defines the
“licensee”. “Licensee” is one who is licensed under sub section (1) of section
4 of the Indian Telegraph Act, 1885. To be noted, without such a licence, a broadcaster
cannot undertake the function of uplinking and downlinking. The licensee also
becomes a “service provider” under sub clause (j) of section 2 of the Act.
There is no difficulty in holding that a broadcaster is a service provider.
Section 2(j) merely says a “service provider” includes the licensee. Thus, a
person can be a service provider despite not being a licensee under the Indian Telegraph
Act, 1885. After all, a public property is licenced in favour of the third
party, which will not have the privilege unless it is conferred accordingly. A
finding to that effect has also been given by the Division Bench of Delhi High
Court in STAR INDIA PRIVATE LIMITED's case referred to supra.

19. Section 3(1AA) of the Telegraph Act being the definition of `telegraph' had
already been introduced into that statute with effect from 2.5.1961. It is in
this context that it has been emphasized that the definitions in the TRAI Act has palpably been
substantially lifted from the Telegraph Act. Therefore, even if the TRAI Act is ignored, telecom services as well as broadcasting services
would be regulated by the Telegraph Act.

The umbilical connection is also apparent from manifold and repeated
references in TRAI
Act to the Telegraph Act. The definition of
licensee and licensor in the former statute refers back to Section 4 of the latter Act. The
Broadcasting Bill which was intended to be contemporaneous legislation to the TRAI Act, was introduced in
Parliament in 1997 and was referred to the Joint Parliamentary Committee for
detailed consideration. The Bill, however, lapsed consequent upon the premature
and precipitate dissolution of Parliament in December 1997. The intention of Parliament
was already manifestly clear, namely, that although broadcasting is inherently
covered under the TRAI Act and the Telegraph Act, its galloping growth has warranted that it should be governed by
a separate statutory structure. It was for this reason that although
broadcasting services would fall within the umbra of the definition of
telecommunication services as available in Section 2(k) of the TRAI Act, it was from the very inception intentionally
excluded there from, in the sanguine expectancy that the Broadcasting Bill
would very soon receive statutory standing alongside the TRAI Act. In the event, however, the
planning proved presumptuous. The Proviso is the penumbra which will persist
only till the passing of the Broadcasting Bill or the Convergence Bill, as the
case may be. It appears to us that this is the intention of Parliament.

17.8. As stated supra, this judgment has been taken note of and approved
by the Appellate Authority in M.P.No.108 of 2009 etc., in Petition No.172 of
2009. Therefore, there is no difficulty in holding that a broadcaster is the
“service provider” under the purview of the Act.

17.9. Much has been said on the definition contained in Section 2(1)(k)
of the Act, which defines a “telecommunication service”.

“(k) “telecommunication service” means service of any description (including
electronic mail, voice mail, data services, audio tax services, video tax
services, radio paging and cellular mobile telephone services) which is made
available to users by means of any transmission or reception of signs, signals,
writing images and sounds or intelligence of any nature, by wire, radio, visual
or other electromagnetic means but shall not include broadcasting services”.

17.10. We must bear in mind that we are dealing with the definition
section. Thus, it is not a substantive provision. It includes service of any
description and therefore, services mentioned thereunder are merely illustrative
in nature. What is important herein is the service being made available to
"the end user". This provision does not define either
telecommunication or broadcasting. Either we can go for external aid or the
impugned regulation, which defined them accordingly. So are the other
definition provisions. There is no difficulty in reading the regulation along
with the impugned regulation atleast with reference to the definitions. This
provision can be read to mean as “which is made available to the users by means of any transmission
or which is made available to users by reception of signs, signals, writing
images and sounds or intelligence of any nature, by wire, radio, visual or
other electromagnetic means”. Therefore, the words “means of any transmission” stand apart as
against reception of signs by wire, radio etc., or other electromagnetic means.
Here again, the word “any transmission” has to be given wider import. All means
of transmissions are included in this. It is axiomatic that a definition clause
cannot be used to understand object as it shall only be otherwise. What is
important is the service made available to the users, though means may be
different. Thus, this section cannot be given a restrictive or narrow meaning
to destroy the very enactment itself. This may also be academic since a
notification came into being as per the proviso and thus, a broadcasting
service is accordingly brought into the purview of the Act. Perhaps that is the
reason why a challenge was made earlier to the very provision itself at the
instance of the petitioner.

17.11. It is pertinent to note that the challenge made to the definition
section was repelled by the Delhi High Court and confirmed by the Apex Court.
Therefore, there is no difficulty in holding that broadcasting service is a
specie of the genus i.e., telecommunication service.

17.12. Section 2(2) speaks in clear terms that words and expressions,
though used and not defined in this Act, but defined in two other enactments
will have the same meaning. There is no difficulty in appreciating the
rationale behind the aforesaid provision. Such a legislation is absolutely permissible especially, when enactments
dealt with similar matters and in any case, there is no challenge made to this
provision. After all, a legislation by reference or incorporation is certainly
permissible in law.

17.13. The next important provision is Section 11 of the Act. Section 11 has got four different parts. This section speaks about
the functions of the authority. It has got two fundamental functions, viz., recommendatory
and regulatory. We are primarily concerned with Sections 11(1)(b), (c), (d),
11(2) and 11(4). It is well settled that when substantive powers are given
through the provisions, to give effect to the object of the Act, the words are
to be treated as illustrative and not exhaustive. Thus, once the power to
regulate the activities of various stake holders is recognised keeping in view
of the predominant public interest, the thing would automatically fall in place. Section 11(b) speaks about compliance of the terms and conditions
of the licence. This also would take in its ambit, licence issued under Section
4 of the Indian Telegraph Act, 1885. This provision also deals with laying down
standard of quality of service. The underlying interest is that of the
consumer. Therefore, Section 11(b) has to be read as a whole. If that is done,
then, there is no difficulty in bringing the availability and existence of the
power in favour of TRAI to regulate. The words “quality of service” and “public
interest” are to be given an extensive and expansive meaning. Similarly, sub
clause “d” of Section 11 provides sufficient power to perform such other
functions as may be necessary to carry out the provisions of the Act.
Therefore, this provision, viz., Section 11(d) is directly relatable to the
provisions of the Act along with this object. In other words, exercise of a
power in this provision need not be read into Section 11 (b) being distinct and
independent. What is to be noted is that the functions might be varied and that
is the reason why, the word “include” has been mentioned while referring to
administrative and financial functions being part. Sub clause 11(2) provides
sufficient ammunition for the authority to specify the rates for the
telecommunication services. It is curious to note that the word “ television
channel” has never been mentioned under the Act as against broadcasting
service. Needless to state that a challenge made to this provision was repelled
by the Division Bench of the Delhi High Court while rejecting the case of the petitioner
to a challenge made to Section 2(k).

17.14. Something can also be said about sub section 3 of Section
11 of the Act. The manner in which this provision is couched would clearly show
the extent of power that can be exercised by the authority. The negative
covenant in a sense highlights the numerous powers, which is otherwise
available to achieve the object. Some times from the exception carved out, the
extent of power can be assessed. Similarly, maintaining transparency while exercising power in discharging
the function would also qualify the extent and the area available. To put it
differently, safeguards are required when powers are more. If it is a mere
administrative action to be exercised on a restrictive field then there is no
need for any safeguard.

17.15. Section 12 of the Act speaks about the powers of the authority
to call for information, conduct investigation etc. In sub clause (4) a power
to issue direction to a service provider, for its proper functioning is
bestowed on the authority. This provision also once again reiterates the extent
of power that can be wielded by the authority over a service provider.

17.16. Section 13 touches upon the power of the authority to issue
direction in discharge of the function under Section 11(1) of the Act. These
directions are meant to be complied by the service providers. While Section 11
speaks about function, this provision, the power. Section 11(1) has to be read
along with Section 13. Here again, it is to be noted that this power is
required only for the reason a larger role is bestowed upon the authority in
his function under Section 11(1) of the Act.

17.17. The proviso makes it clear that such directions are to be restricted
to the matters specified in Section 11(1)(b) of the Act. One can say this is
because Section 11(1)(a) is merely recommendatory in nature.

17.18. Now let us come to the provisions dealing with regulations.
Section 36 is the source provider to make regulation consistent with the Act
and the Rules. Making a regulation is a legislative Act to be done through the
parliament. Under Section 36(2), such regulation may provide for the matters
specified therein. This power has to be exercised in particular and without prejudice
to the general power conferred under Section 36(1) of the Act. Thus, under
Section 36(1), the TRAI Act makes regulations to carry out the objects of the
enactment enshrined under Sections 11, 12 and 13. Such a power is rather wide and primacy. This power as conferred is
merely illustrative as stated above.

17.19. Except complying with the Act and Rules, there is no other
restriction to TRAI Act to make a regulation under Section 36 of the Act.
Section 36(2) specifies various topics for enacting the regulations. They can
also be referable to Sections 11(1)(b) and 11(1)(c). Section 36(2) does not
encroach upon the powers conferred under Section 36(1) of the Act. Hence, there
is absolutely no restriction on the exercise of power under Section 36(1) by
the existence of Section 36(2).

17.20. Section 38 pertains to application of certain laws. Both enactments
viz., Act 24 of 1997 and Indian Telegraph Act, 1885, are to be read in unison
as complementing each other. To be noted that TRAI Act came into being on the
inability of the Indian Telegraph Act, 1885 to deal with the march of
technology. Therefore, there is no apparent conflict, which position is made
clear by Section 38 of the Act. Perhaps that is the reason why the observation
to that effect has also been made by the Division Bench of Delhi High Court in STAR
INDIA PRIVATE LIMITED referred to supra, stating that the umbilical cord between the two
enactments can be seen.

17.21. Now, let us come to the notifications and the impugned regulations.
As discussed and noted, the notification issued
by the Central Government in S.O.44 (E) and 45 (E) dated 09.04.2001 gives sufficient power. It not only
brings a broadcasting services into the fold of the Act but also, all
addressable systems along with standard norms periodicity and revision of rates
for pay channels. Power is to be exercised without prejudice to the context of
Section 11(2) of the Act. Though this notification came into being in the year
2004, the same has not been put into challenge. On the contrary, they did make
a challenge to the very definition clause perhaps on the understanding that the
notification is only consequential. Hence, suffice it is to state that the
petitioners are bound by the Act, notification and the regulations and Tariff
Order issued from time to time. Perhaps, the petitioners understood the
aforesaid position and thus did not raise any murmur to the earlier tariff
orders, which might have also been questioned on the very same lines, as they
now contend.

17.22. The following decisions would clearly establish the availability
and existence of the power under Sections 11 and 36 of the TRAI Act. AVISHEK
GOENKA VS. UNION OF INDIA AND ANOTHER ((2012) 5 Supreme Court Cases 275)

"18. If one examines the powers
and functions of TRAI, as postulated under Section 11 of the Act, it is clear
that TRAI would not only recommend, to the DoT, the terms and conditions upon
which a licence is granted to a service provider but has to also ensure compliance
of the same and may recommend revocation of licence in the event of non-
compliance with the regulations. It has to perform very objectively one of its
main functions, i.e., to facilitate competition and promote efficiency in the
operation of the telecommunication services, so as to facilitate growth in such
services. It is expected of this regulatory authority to monitor the quality of
service and even conduct periodical survey to ensure proper
implementation."

“35. We shall now shift focus
to Section 11 of the TRAI Act which has
been substantially altered by the Amending Act of 2000 inasmuch as its first sub-section has been completely
substituted by the extant one. However, the provision with which we are
presently concerned, viz. Subsection (2), has not been touched. It empowers
TRAI to determine and prescribe "the rates at which the telecommunication
services within and outside India shall be provided." Its Proviso bestows
discretion on TRAI "to notify different rates for different persons or
class of persons for similar telecommunication services and where different
rates are fixed as aforesaid the Authority shall record the reasons therefore.
The fact that different treatment can be meted out to similarly placed persons
is indeed far-reaching.............."

42. In conclusion, therefore, the fixation of tariffs by the Authority
is within their competence even in regard to broadcasters. The devising of an
upper limit of pay channels will have the effect of a wider dissemination and
viewership thereby safeguarding the pre-eminent right of the citizenry in the
context of freedom of speech and expression.

..............

43. Section 11(2) of TRAI Act states that
notwithstanding anything contained in the Indian Telegraph Act, the Authority may notify the rates at which telecommunication services
shall be provided; the Authority may notify different rates for different
persons or class of person for reason to be recorded; the Authority shall not
act against the sovereign and integrity of India; or the security of the State;
or friendly relations with foreign States; or public order, decency or
morality. Learned Senior Counsel for the Petitioners contend that this Section
bestows unchannelised, unguided, undefined and untrammeled powers on the delegate
namely the Authority, and hence should be struck down. What has to be
ascertained in every case where such a submission has been put forward is
whether the legislative policy has been delineated before the delegation is
made, and also whether a correctional system of superintendence and supervision
of the delegate's actions has been put in place. Courts should also consider
the degree to which delegation is inevitable or necessary or expedient. The frontiers
within which the Delegate/Authority must function is further identifiable from
indicia available in the Act itself.

The Preamble enjoins that
the Authority should endeavor to (a) regulate the telecommunication services,
(b) protect the interests of service providers and consumers of the telecom sector,
(c) to promote and ensure orderly growth of the telecom sector. Jural
experience would vouch that fees or rates prescribed in the statute invariably
become unrealistic aeons before they receive corrective attention. Where fees, tariffs
and rates are dependent on market forces it is expedient to leave their
determination and change to the Executive or the Authority or the Regulators,
as the case may be. Where redressal machinery is provided for such delegation
should be impervious to objection. Inasmuch as the TRAI Act provides for the
establishment of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
with jurisdiction inter alia to hear and dispose of appeals against any
direction, decision or order of the Authority, this important safeguard against
any possible abuse or arbitrary exercise of power is duly in place. A second
Appeal to the Hon'ble Supreme Court of India is also provided for.

49. Furthermore, the TRAI is clearly competent to prescribe the
conditions and tariff impugned before us by virtue of the TRAI Act itself. We have already
upheld the legality of Section 2(1)(k), the consequence of which is that broadcasting is undeniably and
unassailably covered by that statute. TRAI accordingly is expected to make recommendation
inter alia in respect of "measures to facilitate competition and promote
efficiency in the operation of telecommunication services so as to facilitate growth
in services (see Section 11(1)(a)(iv))". TRAI must regulate arrangements amongst service providers
of sharing their revenue derived from providing telecommunication services (see
Section 11(1)(b)(iv)) and generally to perform such
other function including such administrative and financial functions as may be
entrusted to it by the Central Government as may be necessary to carry out the
provisions of the Act (see Section 11(1)(d). However, on a perusal of Section 11(2) there is no scope for any controversy concerning the competence of
the TRAI to prescribe the impugned rates at which telecommunication services
are to be provided. Therefore, de hors the CTN Act and the CTN Rules TRAI is
otherwise competent to fix tariffs, as also to prescribe the Standard
Interconnection Agreements.”

"89. .........The exercise of power under Section 36(1) is hedged with the
condition that the regulations must be consistent with the Act and the Rules
made thereunder.

There is no other restriction on the power of the Authority to
make regulations. In terms of Section 37, the regulations are required to be laid before Parliament which
can either approve, modify or annul the same. Section 36(2), which begins with the words “without prejudice
to the generality of the power under sub-section (1)” specifies various topics on
which regulations can be made by the Authority. Three of these topics relate to
meetings of the Authority, the procedure to be followed at such meetings, the
transaction of business at the meetings and the register to be maintained by
the Authority. The remaining two topics specified in Clauses (e) and (f) of Section 36(2) are directly referable to Section 11(1)(b)(viii) and 11(1)(c). These are substantive functions
of the Authority. However, there is nothing in the language of Section 36(2) from which it can be
inferred that the provisions contained therein control the exercise of power by
the Authority under Section 36(1) or that Section 36(2) restricts the scope of Section 36(1).............

97. The same proposition has
been reiterated in Academy of Nutrition Improvement v. Union of India(2011) 8 SCC 274 [Para66] .
The observations contained in the last portion of that paragraph suggesting
that the power conferred upon the rule making authority does not entitle it to
make rules beyond the scope of the Act has no bearing on these cases because it
has not been argued before us that the regulations framed under Section 36 are ultra vires the
provisions of the TRAI Act.”

17.26. The Apex Court has considered with
clarity on the extent of the power available to TRAI and the role required to
be played. These are the necessary paragraphs:

"24. Section 11 of TRAI Act provides for the functions of TRAI. Clause (a) of Sub-section (1) of Section 11 of TRAI Act empowers TRAI
to make recommendations either suo motu or on the request from the licensor, on
the matters enumerated therein. Clause (b) thereof empowers it inter alia to
fix the terms and conditions of inter-connectivity between the service providers.

25.Sub-section (2) of Section 11 of TRAI Act contains a nonobstante clause providing that TRAI may
frame from time to time by order (s) notified in the official gazette the rates
at which the telecommunication services within India and outside India shall be
provided under the said Act including the rates at which messages shall be
transmitted to any country outside India. Proviso appended to Sub-section (2) thereof
empowers TRAI to notify different rates for different persons or class of
persons for similar telecommunication services and where different rates are
fixed as aforesaid TRAI shall record the reasons therefor.

55.TRAI exercises a broad jurisdiction. Its jurisdiction is not only
to fix tariff but also laying down terms and conditions for providing services.
Prima facie, it can fix norms and the mode and manner in which a consumer would
get the services.

56.The role of a regulator may be varied. A regulation may provide
for cost, supply of service on non-discriminatory basis, the mode and manner of
supply making provisions for fair competition providing for label playing
field, protection of consumers interest, prevention of monopoly. The services to
be provided for through the cable operators are also recognised. While making
the regulations, several factors are, thus required to be taken into account.
The interest of one of the players in the field would not be of taken into consideration
throwing the interest of others to the wind."

17.27. The impugned Regulations and Tariff Order have been passed as a
sequel to the earlier ones. The regulatory regime started functioning from the
year 2004 onwards. Thus, the manner of packaging and offering coupled with the
rates cut is regulated from time to time. Consultation process would show an
element of fairness adopted by TRAI. Almost all the objections raised have been
dealt with sufficient reasons as could be seen from the explanatory memorandum
attached to the impugned proceedings. As noted, strangely the petitioners
challenged some of the clauses in the Regulations and the Tariff Order, despite
asking for and agreed upon. Be that as it may, the Regulations and the impugned Tariff Order clearly
mention the object, logic and the reason behind them. They do not fix any cap
on the pricing of the channel. However, it was felt that the underlying
principle that the consumer is the king is being destroyed by the so called
business acumen, marketing strategy or commercial prudence. Suffice it is to
state that the petitioners are aggrieved by the impugned Regulations and the
Tariff Order. Therefore, power can be generously traced to Sections 36, 11(i)(b)
and 11(i)(d) of the TRAI Act. As discussed above, these provisions along with
the Notification do provide sufficient ammunition to sustain the impugned
regulation.

18. IMPUGNED REGULATIONS:

18.1. Chapter 1 deals with the definition clause. This chapter speaks
of al-a-carte channel. On the similar lines, it speaks about the bouquet of
channels. For the first time, the word “broadcaster” has been defined along
with a “Local Cable Operator” and “Multi System Operator”. Incidentally, it
defines “a programme”. “A service provider”, “set top box”, “subscriber” and “a
television channel” have been defined. The following are the definition clauses.

“(h) “broadcaster” means a person or a group of persons, or body corporate,
or any organization or body who, after having obtained, in its name,
downlinking permission for its channels, from the Central Government, is
providing programming services;

(i) “broadcaster’s share of maximum retail price” with reference to a
pay channel or a bouquet of pay channels means any fee payable by a distributor
of television channels to a broadcaster for signals of pay channel or bouquet
of pay channels, as the case may be, and for which due authorization has been
obtained by such distributor from that broadcaster;

(j) “broadcasting services”
means the dissemination of any form of communication like signs, signals,
writing, pictures, images and sounds of all kinds by transmission of
electro-magnetic waves through space or through cables intended to be received by
the general public either directly or indirectly and all its grammatical
variations and cognate expressions shall be construed accordingly;

(kk) “service provider” means
the Government as a service provider and includes a licensee as well as any
broadcaster, distributor of television channels or local cable operator;

(ii) “set top box” or “STB”
means a device, which is connected to or is part of a television receiver and
which enables a subscriber to view subscribed channels;

(mm) “subscriber” for the
purpose of these regulations, means a person who receives broadcasting
services, from a distributor of television channels, at a place indicated by
such person without further transmitting it to any other person and who does not
cause the signals of television channels to be heard or seen by any person for
a specific sum of money to be paid by such person, and each set top box located
at such place, for receiving the subscribed broadcasting services, shall
constitute one subscriber;

(pp) “television channel” means a channel, which has been granted
permission for downlinking by the Central Government under the policy
guidelines issued or amended by it from time to time and reference to the term
‘channel’ shall be construed as a reference to “television channel”.

18.2.
As discussed above, the definition
clauses, which come under chapter-1 are to be read in consonance with the main
Act unless the contrary is proved. Accordingly, “broadcaster” has been defined
as the one, who obtains permission for its channel and provides programme
service. The word “interconnection” has been defined as the one in between the
service providers and the subscribers. Therefore, the relationship between the
service providers and the subscribers has been rightly taken note of. To make
the position clear, a licensee is once again reiterated as the service provider,
which is inclusive of broadcaster, distributor and local cable operator. Therefore,
all the three set of actors have been brought under the purview of the service
provider. A set top box, which otherwise called STB, has been defined as a
device which enables the end user viz., the subscriber to view the subscribed
channels. Therefore, it is clear that without the set top box, which is to
be provided by a service provider, no subscriber can either actually or likely
to view. This definition also makes it clear that what is sufficient is the
availability of a channel to be seen. “Subscriber” has been defined as the one,
who receives the broadcasting services without further transmission. “A
television channel” has been defined as the one, which has been granted
permission for downlinking. Thus, to attract the definition clause, a
permission is mandatory.

18.3. The regulations also define the programme, which means exhibition
of films, features, drama etc. Programme means any television broadcast and
includes: - (i) exhibition of films, features, dramas, advertisements and
serials; (ii) any audio or visual or audio visual live performance or
presentation and the expression "programming service" shall be
construed accordingly.

18.4. The aforesaid definition of word “programme” and “programme
service” will have to be understood as being a member of broadcasting service
family. A broadcasting services is a wide term inclusive of different forms of
broadcasting vis a vis radio broadcasting television broadcasting, web
broadcasting etc. Now in the impugned regulations, we are concerned with
television broadcasting by which both audio ( sounds and video) pictures and
image signals are made available to the public. Hence, this definition clause
makes it clear that it does not takes in its ambit the other forms of
broadcasting service. Therefore, a programming service has been defined
separately to show it distinctly from the other forms of broadcasting services.

18.5. Thus, from the scheme of things, there is no role for a television
channel either under the Act or under the Regulation. The impugned regulation
has come into being through the exercise of the power available under the Act.
So is the case of the impugned Tariff Order. The Tariff Order has been passed
in exercise of the power conferred under Section 11(2) of the Act read with
notification No.39. It does not deal with pricing individual components of the
content, such as, a particular movie or a sport. Programme has never been touched
upon with the specific reference to the nature of content. The following are
some of the reasons assigned by the authority in the explanatory memorandum.

“64. The Authority has noted that at present the uptake of channels on
a-la-carte basis is negligible as compared to the bouquet subscriptions.
Analysis yields that the prime reason for such poor uptake of a-la-carte
channels is that the a-la-carte rates of channels are disproportionately high
as compared to the bouquet rates and further, there is no well defined
relationship between these two rates. As per data available with TRAI, some bouquets
are being offered by the distributors of television channels at a discount of
upto 80% -90% of the sum of a-la-carte rates of pay channels constituting those
bouquets. These discounts are based on certain eligibility criteria/conditions
to be fulfilled by the distributor of television channels in order to avails
those discounts from broadcasters. Such high discounts force the subscribers to
take bouquets only and thus reduce subscriber choice. As a result, while
technically, a-la-carte rates of channels are declared, these are illusive and
subscribers are left with no choice but to opt for bouquets. Bouquets formed by
the broadcasters contain only few popular channels. The distributors of
television channels are often asked to take the entire bouquet as otherwise
they are denied the popular channels altogether or given such popular channels
at RIO rates. To make the matters worse, the distributors of television
channels have to pay as if all the channels in the bouquet are being watched by
the entire subscriber base, when in fact only the popular channels will have high
viewership. In such a scenario, at the retail end, the distributors of
television channels somehow push these channels to maximum number of
subscribers so as to recover costs. This marketing strategy based on bouquets
essentially results in ‘perverse pricing’ of bouquets vis-à-vis the individual
channels.

As a result, the customers are forced to subscribe to bouquets rather
than subscribing to a-la-carte channels of their choice.

Thus, in the process, the public, in general, end up paying for “unwanted”
channels and this, in effect, restricts subscriber choice. Bundling of large
number of unwanted channels in bouquets also result in artificial occupation of
distributors’ network capacity. This acts as an entry barrier for newer TV channels.

65. In order to facilitate subscribers to exercise their options in line
with intention of lawmakers to choose individual channels, in the new framework
the broadcasters will declare to customers/subscribers the MRP of their
a-la-carte channels and bouquets of pay channels. In order to ensure that
prices of the ala- carte channels are kept reasonable, the maximum discount permissible
in formation of a bouquet has been linked with the sum of the a-la-carte prices
of the of pay channels forming that bouquet. A broadcaster can offer a maximum
discount of 15% while offering its bouquet of channels over the sum of MRP of
all the pay channels in that bouquet so as to enable customer choice through
a-la-carte offering and also prevent skewed a-la-carte and bouquet pricing
(refer example 1). The bouquet(s) offered by the broadcasters to subscribers
shall be provided by the distributors of television channels to the subscribers
without any alteration in composition of the bouquet(s). In case a broadcaster
feels that more discount can be provided in formation of the bouquet, it indirectly
means that a-la-carte prices at the first stage has been kept high and there is
a need to revise such a-la-carte prices downwardly. Full flexibility has been
given to broadcasters to declare price of their pay channels on a-la-carte
basis to correct such situations, if it may come.

66. Some stakeholders are of the opinion that limiting the discount to
subscribers while forming bouquets is anti subscriber.

In this regard, while the Authority wants to facilitate the availability
of a-la-carte choice to customers/ subscribers, it does not intend to encroach
upon the freedom of broadcasters and distributors to do business. During the
discussions in the Parliament on the motion for consideration of the Cable Television
Networks (Regulation) Amendment Bill, 2011, the then Minister of Information
and Broadcasting emphasised the need to establish a system for subscribers to
choose a-lacarte channels of choice. The Authority has also made several
attempts in this regard, but for one or the other reason could not succeed.

Here it is important to understand that the Authority has not been
able to do pricing of channels in the absence of pricing of content.

Present trends indicate that majority of channels are priced much below
the prevailing ceiling, but higher ceilings were prescribed to give flexibility
to broadcasters to monetise their channels and freedom to do business. Further,
different channels even in the same genre may have varying cost of production
and potential to monetise, but within the framework. A broadcaster may price even
non-driver channels at a much higher value that they can command. Non-discovery
of reasonable price of a channel in a market is one of the constraints that can
be manipulated and misused to price a channel in a-la-carte from which is
illusionary.

Such high a-la-carte prices permits broadcasters/distributors to provide
high discounts to push non-drivers channels in form of bouquets to the
subscribers while reducing the probability of choosing the a-la-carte channels
of choice as required by the lawmakers in the Parliament. The possibility to
forcing bouquets over a-la-carte choice by using higher discounts can be
further understood by following example, where a 41 broadcaster has a total of
35 pay channels out of which only 5 are driver channels : 67. In the present regulatory
framework incidences have come to the knowledge where discount upto 90% on the
declared RIO prices has been given by broadcasters. Obviously such efforts kill
competition and reduce a-la-carte choice which is anti-subscriber.

Accordingly, the Authority has prescribed a discount of 15% to be provided
by 42
broadcasters at wholesale
level and further 15% to be provided by distributors at retail level. The net
effect to subscribers at retail level will be a discount of approximately 30% on
the bouquets of channels. Therefore flexibility of formation of bouquet has
been given to broadcasters and MSOs both to such an extent that total
permissible discount does not kill the a-la-carte choice. The Authority has
been careful in prescribing a framework which does not encourage non-driver
channel to be pushed to subscribers against their choice. Non-driver channels which
are provided as part of bouquets not only kill choice of the ala-carte channels
but also eat away the channel carrying capacity available with distributors
which may result in artificial capacity constraints at distribution platforms
for launch of new/competitive channels. Such restrictions are anti-subscriber and
have to be carefully handled. Accordingly, the Authority has consciously
decided the present framework of prescribing relationship between a-la-carte
and bouquet prices to protect interest of customers/ viewers and as well as
those of service providers. However, the Authority will keep a watch on the developments
in the market and may review the maximum permissible discount while offering a
bouquet, in a time period of about two years.

68. A broadcaster is free to offer its pay channels in the form of bouquet(s)
to customers. While subscribing to bouquet, a customer may not be aware of the
price of each channel forming the bouquet. Abnormal high price of a pay channel
may result in higher price of a bouquet leading to adverse impact on subscribers’
interests. It is an established fact that bundling of channels complicates and
obscures their pricing. Prices are obscured because subscribers do not always
understand the relationship between the bundle price and a price for each component.
However, the bundling of channels offers convenience to the subscribers as well
as services providers in subscription management. Keeping in view these
realties and to protect the interests of subscribers, the Authority has
prescribed a ceiling of Rs. 19/- on the MRP of pay channels which can be provided
as part of a bouquet. Therefore, any pay channel having MRP of more than Rs.
19/- cannot become part of any bouquet.

The amount of Rs. 19/- has been prescribed keeping in view the prevailing
highest genre wise ceilings of Rs. 15.12 for all addressable systems between
broadcaster & DPOs at wholesale level and further enhancing it 1.25 times
to account for DPOs distribution fee. Broadcasters also have complete freedom
to price their pay 43 channels which do not form part of any bouquet and offered only on
a-la-carte basis. Similar conditions will also be applicable to DPOs for
formation of the bouquets. However, the Authority will keep a watch on the
developments in the market and may review the manner in which a channel can be
provided as part of a bouquet, in a time period of about two years.”

19. THE COPYRIGHT ACT, 1957:

19.1. Before going into the
provisions we are concerned with, it is made abundantly clear that the
discussion is relatable only the issue involved i.e., whether the impugned
regulations and Tariff order militate and violate the Copyright Act.

19.2. Indian Copyright Act, 1914, was a poor cousin of Copyright Act,
1911 of the United Kingdom for obvious reasons. After independence, on the need
to expand the scope and to increase powers and functions, the Copyright Act,
1957 was introduced. The field of legislation for the enactment is entry 49 of
list 1 of VII Schedule. Accordingly, certain rights akin to copyright are also conferred
on the broadcasting authorities in respect of programmes broadcast by them.
When the Act came into being in the year 1957, the word “broadcast” was not
defined.

19.3. In the subsequent amendment introduced by the Act 23 of 1983,
a “broadcast” has been defined and so also, the words “communication to the
public”, which are as under.

(dd) “broadcast” means communication to the public— (i) by any means of wireless
diffusion, whether in any one or more of the forms of signs, sounds or visual
images; or (ii) (ii) by wire, and includes a re-broadcast;

19.4. Thus, a broadcast would mean a communication to the public,
which is inclusive of re-broadcast by the means mentioned thereunder. The words
“communication to the public” have been defined under Section 2ff, which is
appositely referred hereunder.

“(ff) “communication to the public” means making any work or performance
available for being seen or heard or otherwise enjoyed by the public directly
or by any means of display or diffusion other than by issuing physical copies
of it, whether simultaneously or at places and times chosen individually,
regardless of whether any member of the public actually sees, hears or
otherwise enjoys the work or performance so made available. Explanation.— For
the purposes of this clause, communication through satellite or cable or any
other means of simultaneous communication to more than one household or place
of residence including residential rooms of any hotel or hostel shall be deemed
to be communication to the public;”

19.5. “Work” has been defined under sub clause 'y' to mean
any one of the following works.

“(y) “work” means any of the following works, namely:— (i) a literary, dramatic,
musical or artistic work; (ii) a cinematograph film; (iii) a 2 [sound recording];”

19.6. If one reads sub clauses (ff) and (y) of Section 2, making any
work would mean the works mentioned in sub clause 2(y). This should be
available for being seen or heard or otherwise enjoyed by the public directly
or by other means mentioned therein. Therefore, what is to be kept in mind is
the availability of any work to be seen by the general public. This position
has been reiterated once again by the later portion of the definition section
by creating a deeming fiction as to whether any member of the public actually
sees, hears or otherwise enjoys the work, which is made available. Hence, two factors
are important. One is the availability of the work and the other is the
enjoyment by any member of the public. The question as to whether it is seen,
heard or not becomes irrelevant. Therefore, a deeming fiction is created. A
fact has been created, which is otherwise non existent. Hence, much emphasis
will have to be given for the availability and thus, actual seeing or hearing
becomes a non issue.

19.7. When such a work is "communicated to the public"
as defined under Section 2 (ff) through the "means" mentioned in 2
(dd), it becomes a broadcasting. Therefore, a broadcast would actually happen
only when it is communicated to the public. When such an activity is done by an
organisation, it becomes a broadcaster. Accordingly, a cycle has to be completed from the point of view of
the broadcaster to the end user viz.,the subscriber.

19.8. The word “infringing copy” has been defined under Section 2-m
to mean, “(m) “infringing
copy” means— (iv) in relation to a programme or performance in which such a broadcast
reproduction right or a performer’s right subsists under the provisions of this
Act, the sound recording or a cinematographic film of such programme or
performance, if such reproduction, copy or sound recording is made or imported
in contravention of the provisions of this Act;

19.9. To be noted, this definition section speaks about a programme
along with a performance. As stated earlier, the word “broadcast” connotes a
wider meaning as against the programme though they are interchangeable at
times. When a broadcast of a programme takes place containing a work as
defined, a BRR gets created.

20. Copyright (Amendment) Act, 2012: A bird's eye view :

20.1. As much emphasis is made by
the petitioners on the amendment made to the Amendment Act in the year 2012,
let us have a cursory look.

20.2. The Copyright (Amendment) Bill, 2010 was introduced before
the Upper House on March 30, 2010. Until the Bill was introduced in the
parliament, the contents were never let out. The origin of amendment was due to
the grievances aired by the composers and the lyricists from the music
industry. The amendments were sought for by the pressure group for different
reasons. In INDIAN PERFORMING RIGHT SOCIETY
VS. EASTERN INDIA MOTION PICTURES ASSOCIATION (1977 SCR (3) 206), while construing Section 17(c) of the
Copyright Act, the Apex Court held that all music or lyrics created for the
purpose of cinematographic film would be deemed to be owned by the producer in
the absence of any written contract to the contrary. The second reason was to
strengthen the rights of the authors and to protect from unfair contracts. The
third was with respect to the administration of the copyright societies as the existing
ones did not yield the desired result.

20.3. For the abovesaid objective, the Bill sought to introduce the
following proviso to Section 18:

“Provided that in case of any work incorporated in a cinematograph
work, nothing contained in clauses (b) and (c) shall affect the right of the
author in the work referred to in clause (a) of sub-section (1) of section 13.”

20.4. The Parliament Standing
Committee also made a comment on Section 13(1)(a) of the Act which is as under:

"The Committee also takes note of the fact that independent
rights of authors of literary and musical works in cinematograph films are
being wrongfully exploited by the producers and music companies by virtue of
Supreme Court judgment in Indian Performing Rights Society Vs. Eastern Indian Motion
Pictures Association which held that film producer is the first owner of the
copyright and authors and music composers to not have separate rights".

Accordingly, in view of the amendment made, the authors are given right
to own their music and lyrics even if they are created to make a film.

20.5. Towards strengthening the rights of the authors, it is sought
to provide the right to royalty sharing. This has been made as an absolute and
inalienable one. The amendment also provides, withholding of such a right even
after the licence granted in favour of a third party. Incidentally, the
amendment gave substantial rights to the authors over the copyright societies.

20.6. These amendments also went into the issue of transparency
qua the copyright society. Accordingly, a copyright society is mandated to
publish tariff scheme as against the earlier mere submission to the Registrar
of Copyright. Further more, the right to challenge the Tariff Scheme of a
copyright society has been given to any person aggrieved. The Copyright Board
is also sufficiently empowered to discharge its functions. Thus it could be
seen that the object of the 2012 amendment is to enhance and protect the rights
of the copyright holder in general and the music industry in particular. This can also be seen from the speech made by the Honourable Minister
on the floor of the parliament.

20.7. Chapter III of Copyright Act, 1957, deals with meaning of copyright
and the work in which copyright subsists. Suffice it is to state that they do
not concern with a broadcast reproduction right. Section 16 once again deals with a copyright, which cannot be enforced
otherwise than the one provided under the Act. Thus, it restricts a copyright.
Though this Section does not speak about a broadcast reproduction right, even
otherwise, such a right can only be under the Act. To be noted, this is not a
substantive provision, it fixes the area of operation qua a right.

20.8. Chapter IV governs ownership of copyright and the rights of
the owner. In this, section 18 speaks of “assignment of copyright” with Section
19 mode of assignment. These provisions are meant to protect the right of the
copyright holder with specific reference to the royalty factor.

20.9.
Chapter VI of the Copyright Act, 1957
concerns itself with licences. Under Section 30, a licence may be granted by
the owner in favour of the licensee. Section 31-D specifically mentions the requirement
of the licence for broadcasting of literary and musical works and sound
recording. Here again, it mandates a broadcasting organisation to pay the owner
of the copyright the royalties and for that purpose maintain the accounts.
Thus, even this provision speaks about the duty of the broadcasting agencies
vis a vis the rights of the owner. Chapter VII speaks of the registration and
functioning of the copyright societies. The object is to make sure that a
copyright holder is not left in lurch. That can also be seen on a perusal of
Section 33-A of the Act, which speaks of tariff scheme and Section 34, which
deals with administration of right of the owner by the copyright society. On a
perusal of the speech of the Honourable Minister for Information and Broadcasting
while introducing the Bill and the bird's eye view of the amendment, one can
say with certainty that these provisions have been introduced to avoid the
exploitation and alienation of the holder of the copyright. A specific
reference has been made on the suffering of the copyright holder when
substantial profit went into the kitty of a licensee much to his agony. Suffice
it is to state that it does not contemplate the process of transmission between
a broadcaster and a distributor prior to a broadcast, as defined under the Act.

20.10. Much has been said about the 'broadcast reproduction right'.
Rights of broadcasting organisation have been brought under Chapter VIII. The
Copyright Act only deals with the rights and duties of individuals such as
copyright holder and the licensee with a limited right to a third party.
Therefore, it does not deal with a larger public interest, especially when the
airwaves and frequencies are owned by the Government which is duty bound to
protect the overwhelming public interest of the subscriber. This provision also
does not deal with a "broadcast right" as such but only a
"broadcast reproduction right".

Before discussing further let us see the provision as such.

“37. Broadcast reproduction right.— (1) Every broadcasting
organisation shall have a special right to be known as “broadcast reproduction
right” in respect of its broadcasts.

(2) The broadcast reproduction right shall subsist until
twentyfive years from the beginning of the calendar year next following the
year in which the broadcast is made.

(3)During the continuance of a broadcast reproduction right in relation
to any broadcast, any person who, without the licence of the owner of the right
does any of the following acts of the broadcast or any substantial part
thereof,— (a) re-broadcast the broadcast; or (b) causes the broadcast to be
heard or seen by the public on payment of any charges; or (c) makes any sound
recording or visual recording of the broadcast; or (d) makes any reproduction
of such sound recording or visual recording where such initial recording was done
without licence or, where it was licensed, for any purpose not envisaged by
such licence; or 1 [(e) sells or gives on commercial rental or offer for sale
or for such rental, any such sound recording or visual recording referred to in
clause (c) or clause (d)].

shall, subject to the provision of section 39, be deemed to have infringed
the broadcast reproduction right.”

20.11. Section
37 as aforesaid deals with the special right known as “broadcast reproduction
right”. What is important to be noted here is that such a right is in respect
of the "broadcast". Therefore, the reproduction right would emanate
only in respect of a broadcast. Until and unless the broadcast does takes place
in the manner as defined in the Act, there is no corresponding right over a
broadcast reproduction. Sub clause 2 once again reiterates that such a right shall subsist
from the beginning of the calendar year following the year in which the broadcast
is made.

20.12. The broadcast reproduction right is a right ascribed to a broadcasting
organisation being a special one. Such a right is controlled and circumscribed
by Section 37 of the Act. This provision has to be seen in tune with the other
provisions, which are specifically applicable under Section 39-A. As discussed
earlier, most of the provisions, in fact, deal with the duty of the
broadcasting organisation and the right, if any, could only be confined to the
provisions applicable and not beyond.

20.13. There is absolutely no copyright or a broadcast reproduction
right given independently to a television channel. Such a right is relatable
and attributable to a "particular broadcast" alone. For example, it can be made applicable to a movie being a work and
the programme as defined under the Act. In other words, the copyright does not
recognise any specific right of television channel but it may become a
broadcasting organisation, which can be restricted to a broadcast made. Hence,
it is programme, work and thus broadcast centric.

20.14. To understand the position better, let us see Section 37 as
it stood before at the time of Act 14 of 1957.

“37. Broadcast reproduction right-- (1) Where any programme is broadcast
[****] by the Government or any other broadcasting authority, a special right
to be known as "broadcast reproduction right" shall subsist in such
programme."

20.15.
This section starts with the words "where any programme is
broadcast". By the amendment, which stands as of now, the word "programme"
has been taken out as against "broadcast". This is to give a wider
coverage. Similarly, the words “by radio, television” were omitted in view of
the subsequent technological development. The present amendment is also
necessitated by the entry of private actors.

20.16. Section 37 is an unique piece of legislation and thus one of
its kind. While it speaks about the right of a broadcasting organisation, it
also controls the extent of it. Thus, Section 37 is a core provision, which
exclusively deals with a broadcasting reproduction right.

20.17. Section 37 certainly comes into play only after the initial
broadcast. Section 37(3), in specific words speaks about the continuance of the
broadcast reproduction right, in relation to “any broadcast”. Here again, the
word "broadcast" assumes a significance along with
"continuation". Sub clauses (a) to (d) create a deeming fiction
towards infringement of the broadcast reproduction right. If we have a look at
sub clauses (a) to (c) of Section 3, they again speak about the reproduction of
the broadcast being heard or seen by the public on payment of charges or making
of sound recording. Thus, if one connects Section 37 with the definition
section, accrue of a right is only after the initial broadcast takes place.
After all, an interpretation has to be given on the understanding of the
provisions and certainly not on a fact situation. Perhaps for violating right,
if any, prior to the broadcast takes place, an organisation can seek the remedy
in some other forum. But certainly that cannot be a factor to interpret the provisions
otherwise. Therefore, on an analysis of Section 37, it is imperative that a
broadcast should take place by reaching public either actual or available. This
thinking is also strengthened by the presence of Section 38, which speaks about
a performance right, which would also accrue when he actually does it which is
importantly relatable to that performance alone.

20.18. Section 39-A deals with application of certain provisions in
case of broadcast reproduction right. It does not speak about the general
provisions, which are otherwise applicable to a copyright holder. Since
broadcasting reproduction right is a special right, it does not take away the
right of a copyright holder over a broadcasting organisation. Therefore,
Section 39-A has to be understood to mean, protecting the rights of a copyright
holder as against the organisation being a licensee. A purposive interpretation
of this section along with the proviso coupled with the speech delivered by the
Honourable Minister on the floor of the parliament would settle the issue.

20.19. Much has been said on the application of Section 33-A of the
Act read with Rule 56, which deals with tariff scheme. On combined reading, it
is primarily a right involving a copyright holder. Secondly, it deals with the nature and quantum of royalties. A
society is supposed to collect the royalty from the licensee in advance under Rule
56((5) of the Rules. It acts and performs on behalf of the owner who in most of
the cases is under a disadvantageous position. A window has been provided to a
person aggrieved over the fixation of tariff.

20.20. Thus, on a conspectus of the above, there is no difficulty in
holding that Copyright Act, 1957, and the TRAI Act, 1997, do stand apart in the
respective arena. Their fields are distinct and separate. Under the Copyright Act, no third party is involved. There is no element
of regulation. The TRAI Act is a sector specific Act. As airwaves is a public
property, there is no overwhelming public interest under the Copyright Act
unlike TRAI Act.

“31. It is also argued that in view of the TRAI Act, the provisions of the Copyright Act cannot be enforced. In the wake
of the judgment of the Supreme Court, we cannot read both the Acts in that
manner and come to a conclusion that the subsequent TRAI Act would take away the power
of civil Court to entertain a suit filed for infringement of copyright. Both the Copyright Act as well as the TRAI Act operate in the respective
field. Whereas the Copyright Act deals with the ownership of the copyright and
in case of infringement of that right, to enable the copyright owner to approach
the civil Court seeking for injunction and other remedies, the TRAI Act confines itself to the
disputes between the parties enumerated under Section 14 of that Act.

33. While interpreting two inconsistent or obviously repugnant
provisions of an Act, the Court should make an effort to so interpret the
provisions as to harmonise them so that the purpose of the Act may be given
effect to and both the provisions may be allowed to operate without rendering either
of them redundant.

34. Interpretations are to be made to salvage a legislation to achieve
its objective and not to let it fall merely because of a possible ingenious
interpretation. It is also a settled position of law that where a provision is
capable of one of two interpretations, the interpretation which validates
rather than one which may invalidate a provision applies.

35. There might be some
conflict between the rules and the provisions of the Act. There may also be a
conflict sometimes between two Sections to be found in the same Act. In such
circumstances, Courts have to try and reconcile them as best it may. If it
cannot be done, the Courts have to determine which is the leading provision and
which the subordinate provision and which must give way to the other. That would be so with regard to the enactment and with regard to
rules which are to be treated as if within the enactment. Even if there be any
conflict between the provisions, it is the duty of the court to harmonize the construction
of statute.

36. As per the Rules of Statute
and Interpretation as stated supra, in the event of conflict between the rules
and provisions of the Act, Courts have to try and reconcile them at best it may
and even if there be any conflict between the rules and provisions, it is the
duty of the Court to put harmonious construction.”

20.23.
The Telecom disputes Settlement and Appellate Tribunal by an order dated
07.12.2015 held as follows:

“We now come to the submissions made by Mrs. Pratibha M. Singh, learned Senior Advocate appearing for Taj that
in interpreting the Interconnect Regulations, primacy must be given to
agreement based on mutual negotiations following the scheme of the Copyright Act 1957.

Section 39(A) of the Copyright Act does not make section 31 applicable to "broadcast reproduction rights" and it is thus
true that under the scheme of the Copyright Act, "broadcast reproduction rights" do not come under compulsory
licensing. However, exclusion from compulsory licensing under the Copyright Act by no means suggests that provisions
requiring "must provide" of the broadcasting content on
"non-exclusive and non-discriminatory" terms may not be mandated in a
different set of statutes, aimed at regulating the broadcasting service. It
needs to be borne in mind that under the Copyright Act there is an omission and not a prohibition or bar against
compulsory licencing for "broadcasting content rights".

Petition No.151(C) of 2010 disposed of by judgment and order dated
4 February 2011. Thus, contrary to the submissions made by Mrs. Singh, the
matter of compulsory licencing of "broadcasting content rights" is
left open to be dealt with in a different context, by a different set of laws, regulating
another area of societal demands. In case of broadcasting service the Regulator
felt, and very rightly so, that "must provide' of the broadcasting content
is the first step towards any meaningful regulation of the service and the
omission of such a condition would give unmatched monopolistic power to the
broadcaster and would leave the broadcasting service completely at its mercy.
It is well settled that two central legislations may overlap on the same subject
matter. And as long as there is no doubt as regards the legislative competence
or the source of legislative power, the courts have consistently upheld any
action taken under a certain Act in regard to a matter that may be primarily covered
by another legislation 18 . Other sectoral regulators have also rejected the
argument that a compulsory licensing regime can only be created under the Copyright Act and that creation of a
virtual compulsory licensing regime under some other statute would be ultra
vires19.” Suffice it is to state that
the petitioners are the parties to the aforesaid decision.

20.24. COGECO CABLE INC., ROGERS COMMUNICATIONS INC., Vs.
BELL MEDIA INC. (FORMERLY
GLOBEMEDIA INC.) (2012 SCC 68): An interesting case dealt with by the Supreme Court of Canada came
to the notice of this Court by chance, though not placed by the respective
counsels. It would be worthwhile to consider the facts and the issues involved.
This Court is also of the view that having come to know of the decision, it
would be otherwise not fair not to discuss it. Thus keeping in mind the legal position qua the precedential value
of foreign judgment, let us discuss.

20.25. The Canadian Broadcasting System is regulated and supervised
by the Canadian Radio-television and Telecommunications Commission
("CRTC") under the Broadcasting Act, SC.91, C 11. A regulated regime
was sought to be introduced in the year 2010 by which the private local
television stations (broadcasters) could choose to negotiate direct
compensation for the retransmission of their signals by the Broadcasting
Distribution Undertakings ("BDUs") such as cables and satellite
companies. These companies can be referred as distributors. This new regime
empowers a broadcaster to authorise or prohibit a distributor from
retransmitting their programming service.

20.26. This regime was disputed by the "BDUs" inter alia
contending that there is no power under the Broadcasting Act which was available
only under the Copyright Act. The "CRTC" accordingly referred the
following question to the Federal Court of Appeal:

“Is the Commission
empowered, pursuant to its mandate under the Broadcasting Act, to establish a
regime to enable private local television stations to choose to negotiate with broadcasting
distribution undertakings a fair value in exchange for the distribution of the
programming services broadcast by those local television stations?”

20.27. The contentions raised by the
distributor companies were accordingly rejected on both the legal issues. A
further challenge was made to the Supreme Court of Canada. By a slender
majority of 5:4, appeal was allowed.

20.28. Before proceeding further, let us place on record the relevant
provisions. Section 3(1) deals with the policy objectives. Section 3(1) of the Broadcasting Act declares the broadcasting
policy for Canada.

“3. (1) It is hereby declared as the broadcasting policy for Canada that (e) each element of the
Canadian broadcasting system shall contribute in an appropriate manner to the
creation and presentation of Canadian programming;

(f) each broadcasting
undertaking shall make maximum use, and in no case less than predominant use,
of Canadian creative and other resources in the creation and presentation of
programming, unless the nature of the service provided by the undertaking, such
as specialized content or format or the use of languages other than French and
English, renders that use impracticable, in which case the undertaking shall
make the greatest practicable use of those resources; .........................................

(s) private networks and programming undertakings should, to an extent
consistent with the financial and other resources available to them, (i)
contribute significantly to the creation and presentation of Canadian
programming, and (ii) be responsive to the evolving demands of the public; and

(t) distribution undertakings
(i) should give priority to the carriage of Canadian programming services and,
in particular, to the carriage of local Canadian stations, ..............................................................................

(iii) should, where programming services are supplied to them by broadcasting
undertakings pursuant to contractual arrangements, provide reasonable terms for
the carriage, packaging and retailing of those programming services."

20.29. Sections 9 and 10 deal with
the powers and functions of the Commission inclusive of a power to make
regulations. They are as under:

“9(1) Subject to this Part, the Commission may, in furtherance of its objects,
(a) establish classes of licences; (b) issue licences for such terms not
exceeding seven years and subject to such conditions related to the
circumstances of the licensee (i)as the Commission deems appropriate for the implementation
of the broadcasting policy set out in subsection 3(1), and (ii)in the case of
licences issued to the Corporation, as the Commission deems consistent with the
provision, through the Corporation, of the programming contemplated by paragraphs
3(1)(l) and (m); (c)amend any condition of a licence on application of the
licensee or, where five years have expired since the issuance or renewal of the
licence, on the Commission's own motion; (d)issue renewals of licences for such
terms not exceeding seven years and subject to such conditions as comply with
paragraph (b); (e)suspend or revoke any licence; (f)require any licensee to
obtain the approval of the Commission before entering into any contract with a
telecommunications common carrier for the distribution of programming directly
to the public using the facilities of that common carrier; (g)require any licensee
who is authorized to carry on a distribution undertaking to give priority to
the carriage of broadcasting; and (h)require any licensee who is authorized to
carry on a distribution undertaking to carry, on such terms and conditions as
the Commission deems appropriate, programming services specified by the
Commission.

10.(1)The Commission may, in furtherance of its objects, make regulations
(a)respecting the proportion of time that shall be devoted to the broadcasting
of Canadian programs; (b)prescribing what constitutes a Canadian program for
the purposes of this Act; (c)respecting standards of programs and the
allocation of broadcasting time for the purpose of giving effect to the broadcasting
policy set out in subsection 3(1); (d)respecting the character of advertising
and the amount of broadcasting time that may be devoted to advertising; (e)respecting
the proportion of time that may be devoted to the broadcasting of programs,
including advertisements or announcements, of a partisan political character
and the assignment of that time on an equitable basis to political parties and
candidates; (f)prescribing the conditions for the operation of programming
undertakings as part of a network and fo9r the broadcasting of network
programs, and respecting the broadcasting times to be reserved for network
programs by any such undertakings; (g)respecting the carriage of any foreign or
other programming services by distribution undertakings; (h)for resolving, by
way of mediation or otherwise, any disputes arising between programming
undertakings and distribution undertakings concerning the carriage of programming
originated by the programming undertakings; (i)requiring licensees to submit to
the Commission such information regarding their programs and financial affairs
or otherwise relating to the conduct and management of their affairs as the
regulations may specify; (j)respecting the audit or examination of the records
and books of account of licensees by the Commission or persons acting on behalf
of the Commission; and (k)respecting such other matters as it deems necessary
for the furtherance of its objects;

20.30. By a majority decision, it was held that the Act mainly deals
with protecting and enhancing the cultural aspect. Section 3(1) merely deals
with declaration of a policy and therefore cannot be provided with an
independent grant of power. Section 3(1) is also to be seen in the light of
intendment. The subject matter of the regulation cannot be traced to section 9
and 10. Thus the regulation ultra vires the Act.

20.31. The second issue is with respect to the infringement of the
provisions of the Copyright Act. Section 21(1) of the Act deals with limited
rights of a copyright holder with a communication signal that it broadcasts.
Such a right is also subject to the one available under Section 31(1) in favour
of "retransmitter", who can be called for our purpose as a
distributor. The aforesaid provisions are hereunder:

“21(1). Subject to subsection (2),
a broadcaster has a copyright in the communication signals that it broadcasts,
consisting of the sole right to do the following in relation to the
communication signal or any substantial part thereof: (a)to fix it, (b)to
reproduce any fixation of it that was made without the broadcaster's consent, (c)to
authorize another broadcaster to retransmit it to the public simultaneously
with its broadcast, and (d)in the case of a television communication signal, to
perform it in a place open to the public on payment of an entrance fee, and to
authorize any act described in paragraph (a), (b) or (d).

31(1) In this section, "new media retransmitter" means a
person whose retransmission is lawful under the Broadcasting Act only by reason
of the Exemption Order for New Media Broadcasting Undertakings issued by the
Canadian Radiotelevision and Telecommunications Commission as Appendix A to
Public Notice CRTC 1997-197, as amended from time to time; "retransmitter"
means a person who performs a function comparable to that of a cable
retransmission system, but does not include a new media retransmitter.

"signal" means a
signal that carries a literary,dramatic, musical or artistic work and is
transmitted for free reception by the public by a terrestrial radio or
terrestrial television station.

(2)It is not an infringement of copyright for a retransmitter to communicate
to the public by telecommunication any literary, dramatic, musical or artistic
work if (a) the communication is a retransmission of a local or distant signal;
(b) the retransmission is lawful under the Broadcasting Act; (c)the signal is
retransmitted simultaneously and without alteration, except as otherwise
required or permitted by or under the laws of Canada; (d)in the case of the
retransmission of a distant signal, the retransmitter has paid any royalties,
and complied with any terms and conditions, fixed under this Act, and (e)the
retransmitter complies with the applicable conditions, if any, referred to in
paragraph (3)(b).

(3) The Governor in Council may make regulations (a)defining “local
signal” and “distant signal” for the purposes of subsection (2); and (b)prescribing
conditions for the purposes of paragraph (2)(3), and specifying whether any
such condition applies to all retransmitters or only to a class of
retransmitter.

20.32. On this, it was held that the right which is otherwise enured
in favour of the retransmitter/distributor cannot be taken away through a
regulation by CRTC under the Broadcasting Act. Both these reasons were not
agreed upon in the dissenting decision.

20.33. Though in the first blush it might appear as if the same rationale
may well be applied to the case on hand, it is not so. The Canadian Supreme
Court proceeded on the footing that there is an element of public interest in
the Copyright Act as against the Broadcasting Act. The position is totally
different before us. It is rather otherwise. The aforesaid decision has been
rendered on the basis of provisions contained therein and thus has no
application to our case. If there is a public interest in a lis between two
parties, be it a copyright owner on one hand and the licensee on the other
hand, the same cannot become a social or welfare legislation. There is a
difference between an Act which is meant to protect and enhance the rights of the
general public and the one which upholds the interest of one group of persons
which might lead to an element of fairness. Providing a level playing field and
creating an element of fairness is different from a welfare legislation. The
power conferred under the TRAI Act as discussed at length is sufficient enough
to cover the present Regulations and Tariff Order. The Canadian judgment also
throws light on one important issue. Once again it deals with the broadcasting
of only a "programme". Secondly the regulation therein was meant to
act between a broadcaster and a distributor by regularising the power available
under the Act. It is to be noted that such a regulation passed providing road
map for the inter se relationship between the broadcaster and the distributor
has already been upheld by the Court in our case. There is no BRR involved in
the copyright in Canada. The Court also gave a finding that the activity sought
to be introduced is governed and controlled by the Copyright Act, a situation
totally nonexistent before us. The dispute before the Canadian Court was between
the broadcasters and the distributors. Therefore, the interest of the
subscriber was never a point for consideration. There is no repository of
source under our Copyright Act. It is only available with the TRAI Act. Hence,
in the considered view of this Court, the aforesaid decision is to be seen in
its own context.

21. INDIAN
TELEGRAPH ACT, 1885.

21.1. This enactment is of vintage - origin having crossed a century
and a quarter. The deficiency in this enactment has in fact broughtforth the
TRAI Act, 1997. As held by the Courts, the provisions of this Act will have to
be read in consonance with the TRAI Act, which is also indicated in Section
2(2) and 38. Part II deals with the privileges and powers of the Government. As
per Section 4, exclusive privilege to grant licence lies with the Central
Government.

Without a licence or a permission under this section, one would
not become eligible and entitle to use the airwaves. Such an entity will not come
under the purview of the TRAI Act as the very right to use airwaves would get
lost. When once a permission has been obtained, which is traceable to Section 4
of the Indian Telegraph Act, 1885, a status of the licensee under Section 2(e)
of the TRAI Act comes into being. Section 4 is the sole provision, which
enables the Central Government to part with this exclusive privilege to a third
party to deal with the work under telegraph or telecommunication service.

This aspect has been dealt with in extenso in SECRETARY
OF MINISTRY OF INFORMATION AND BROADCASTING VS. CRICKET ASSOCIATION OF BENGAL
((1995) 2 Supreme Court Cases 161) referred supra. Section 4 not only govern a broadcasting
organisation, but also a DTH operator being the distributor. It is to be noted
that rules have been framed for the usage of airwaves frequencies and spectrum.
Suffice it is to state that no more interpretation is required on the scope of
Section 4 since the first petitioner itself took a plea before the Tribunal in STAR
INDIA PRIVATE LIMITED VS. BSNL that it is service provider within the meaning of TRAI Act and
accordingly, it was held that any permission granted by any Ministry to a
broadcaster is to be construed as a licence within the meaning of the Indian Telegraph
Act, 1885. BHARTI AIRTEL LTD., V. UNION OF INDIA ((2015) 12
Supreme Court Cases 1).

"42. By a statutory declaration made under Section 4 of the Indian Telegraph
Act, 1885, it is declared that the Government of India shall have the exclusive
“privilege for establishing, maintaining and working telegraphs” (which
includes telephones). The proviso to Section 4 of the said Act authorizes the Government of India to grant
license to establish, maintain and work telegraphs (which includes telephones)
“on such conditions and in consideration of such payments” as it thinks fit.
Telephones include both wired and wireless telephones like cellular mobile
phones, the establishment and working of which necessarily requires access to
spectrum which again is controlled by the Government of India as it is already
declared to be a natural resource by this Court. It can thus, be seen that no
person other than the Government of India has any right to establish, maintain
and work telephones. It is the exclusive privilege of the Government of India,
which could be permitted to be exercised by others by a grant from the
Government of India.

43. In other words, such licences are in the nature of largesse from
the State. No doubt, the authority of the State to distribute such largess is
always subject to the condition that the State must comply with the conditions
of Article 14 of the Constitution i.e.
the distribution must be on the basis of some rational policy. Even the
language of the proviso to Section 4 of the Telegraph Act, which stipulates that the grant of license should
be “on such conditions and in consideration of such payments as it thinks fit”,
must necessarily be understood that the conditions must be rational and the
payments forming the consideration for the grant of license must be
nondiscriminatory.

The conditions contained in the licenses in question stipulate
that the term of the license could be extended on mutually agreed terms, if the
Government of India deems it expedient. The obligations of the Government of
India flowing from the Constitution as well as a statute necessarily require
the Government of India to grant licences as rightly pointed by the Tribunal
(TDSAT) only “in public interest and for public good”. "

21.3. Thus, the contention on the restrictive scope of Telegraph Act
does not hold water in the teeth of the specific provisions contained in
Section 6A which provides sufficient authority to fix the rates, messages and
fix other conditions.

21.4. Both these enactments viz., TRAI Act, 1997 and the Indian Telegraph
Act,1885 are to be read together and even dehors.

22. CABLE TV NETWORKS (REGULATION) ACT, 1995

22.1. This Act was also introduced
using power conferred by the constitution along with the field of legislation
as in the case of the TRAI Act, 1997. It was meant to control and regulate
Cable Television Network. Thus, it should be kept in mind the specific object
of this enactment. The definition section defines an authority, which is none other
than the fourth respondent viz., TRAI Act. A broadcaster has been defined as
the one who provides the programme service. Incidentally, the words “programme” and “programming service” have
also been defined. However, it is interesting to note that this definition of
programme has been made to mean any television broadcast. It also makes clear,
the scope and ambit of the enactment.

22.2. Section 4-A of the Act deals with transmission of programme
through digital addressable systems. This came into being with effect from
25.10.2011 by taking note of the technological development. The usage of set
top box has been taken note of under this section through the explanation. This
section also defines expression encrypted and unencrypted apart from free to
air channel and pay channels. The Act also seeks to regulate the programme code
and the developments code. Thus, this Act has also to be read along with the
TRAI Act. It only helps TRAI Act through its provisions. Rule 10 was
substituted by GSR940(E) dated 28.04.2012. Rule 10 as it stands before the
amendment.

"10. Nature and prices of channels: (1) Every broadcaster shall declare
the nature of each of its channels as ‘pay’ or ‘free-toair’ as well as the
maximum retail price of each of its ‘pay’ channels to be charged by the
multi-system operators or local cable operators from the subscribers in each of
the notified areas. (2) Every broadcaster shall file his declaration of the nature
and prices of channels under sub-rule (1) before the Authority and the Central
Government within fifteen days of the date of notification by the Central
Government under section 4 A of the Act. (3) If in the opinion of the
Authority, the price declared by the broadcaster in respect of any of its pay channels
is too high, the Authority may, under section 11 of the Telecom Regulatory
Authority of India Act, 1997 (24 of 1997), fix and declare the maximum retail
price of such a pay channel or fix a general maximum retail price for all pay
channels within which the broadcasters may declare their individual prices for
each pay channel, to be paid by the subscribers in any of the notified areas,
and such an order of the Authority shall be binding on the broadcasters and the
multi-system operators and local cable operators." This present rule after substitution.

" 10. Obligations of broadcaster, multi-system operator and cable
operator:- Every
Broadcaster, Multi-System Operator and cable operator shall comply with the
regulations, guidelines and orders as maybe made or issued by the
Authority."

22.3.
This rule was amended to bring out more power to the authority. Difficulties
are faced on the application of the tariff order as it existed at the relevant
point of time to the cable services in the notified areas. This was because of
the existence of the then Rule 10.

Accordingly, confusion was likely to be created in defining retail
price as well as wholesale price of a channel in a notified area. Thus, it was decided
to extend the tariff dispensation in the then tariff order to the cable
services in a conditional access system notified area(cs).

This was dealt with in the explanatory memorandum appended to the tariff
order. The learned counsel for TRAI furnished the communications leading to the
amendment to the Court. Objections have been raised to the effect that they
were not accepted even during the earlier hearing. Be that as it may, there is
nothing to contradict the conclusion arrived at in the explanatory memorandum leading
to the rationale behind the amendment. The relevant passage is fruitfully
extracted.

“III Applicability to the notified CAS areas: 47. As already indicated in
paragraph 15 supra, the Authority is of the view that the tariff dispensation
for broadcasting and cable services can follow two broad frameworks, one for addressable
systems and the other for non-addressable systems. The general principles of
tariff determination under the present tariff order are, thus, intended to be
applicable to all addressable systems, including cable services provided through
conditional access systems (CAS) in areas notified by the Central Government
under section 4A of the Cable Television Networks (Regulation) Act, 1995.
However, the immediate application of the present tariff order to cable services
in such notified areas may lead to an anomaly as regards specification of
wholesale and retail rates for pay channels. This is on account the fact that
there are certain existing provisions in the Cable Television Networks Rules, 2004
relating to fixation of prices of channels. Rule 10 of the said Rules provides,
inter alia, that every broadcaster shall declare the nature of each of its
channels as “pay” or “freeto- air” as well as the maximum retail price of each
of its pay channels to be charged by the multi system operators or local cable
operators from the subscribers in areas notified by the Central Government
under section 4A. The tariff dispensation provided in the present order for
addressable systems, on the other hand, mandates that a broadcaster shall specify
its “wholesale” rates for addressable platforms. In case, the tariff
dispensation in the present tariff order is immediately extended to cable
services in such CAS notified areas, it may result in a situation where a
broadcaster would be required to define retail price as well as wholesale price
of its 33 channels in respect of such notified areas. In order to prevent this
anomaly, a separate recommendation is being made to the Government for amending
Rule 10 of the Cable Television Networks Rules. Till the required amendment is carried
out by the Government, the existing tariff dispensation for cable services in
areas notified by the Central Government under section 4A of the Cable Act,
i.e., under the Telecommunication (Broadcasting and Cable) Services (Third)
(CAS Areas) Tariff Order, 2006 (6 of 2006) and the revenue sharing arrangements
under the Telecommunication (Broadcasting and Cable Services) Interconnection
Regulation, 2004” (13 of 2004), as they stand at present, shall continue to
apply. The tariff dispensation under the present tariff order will be extended,
mutatis mutandis, to cable services in such CAS notified areas after the
Central Government makes requisite amendments in the relevant provisions of the
Cable Rules."

Therefore,
Rule 10 as it stands today cannot be interpreted as the petitioners seek, for
the aforesaid reason. It also cannot be construed to abdicate the power to the
copyright Act in pursuant to its subsequent amendment. There is no comparison
whatsoever between the two enactments, which do not have the remotest
connection or overlapping in their field of operation. This aspect has also
been taken note of by the Tribunal in M/S NOIDA SOFTWARE TECHNOLOGY PARK
LTD., VS. M/S MEDIA PRO ENTERPRISE INDIA PVT LTD., AND OTHERS (Petition
No.295(C) of 2014 dated 07.12.2017).

22.4. It is pertinent to note that the petitioner was also a party
before the aforesaid proceedings. In fact, in the said decision, the earlier
decision of the Division Bench of Delhi High Court in the writ petition filed
by the petitioner was taken note of. Accordingly, paragraph 19 of the aforesaid
judgment was quoted with approval, which is as under.

"49. Furthermore, the TRAI is clearly competent to prescribe the conditions
and tariff impugned before us by virtue of the TRAI Act itself. We have already upheld the legality of Section 2(1)(k), the consequence of
2007SCC On Line Del 951 which is that broadcasting is undeniably and
unassailably covered by that statute. TRAI accordingly is expected to make
recommendation inter alia in respect of "measures to facilitate
competition and promote efficiency in the operation of telecommunication
services so as to facilitate growth in service [see Section 11(1)(a)(iv)]".

TRAI must regulate arrangements amongst service providers of sharing
their revenue derived from providing telecommunication services [see Section 11(1)(b)(iv)] and generally to perform
such other function including such administrative and financial functions as
may be entrusted to it by the Central Government as may be necessary to carry
out the provisions of the Act [see Section 11(1)(d)]. However, on perusal of Section 11 (2) there is no scope for any controversy concerning the
competence of the TRAI to prescribe the impugned rates at which telecommunication
services are to be provided. Therefore, de hors the CTN Act and the CTN Rules
TRAI is otherwise competent to fix tariffs, as also to prescribe the Standard
Interconnection Agreements."

22.5. It was further held by relying upon the earlier Tribunals order
that both the TRAI Act and Cable TV Net Works(Regulation) Act, 1995, do have
the power to regulate the broadcasting service. A fruitful extraction of the
following relevant paragraph is hereunder.

“The Tribunal, referring to Section 11(2) of the TRAI Act negated the submissions and held that the
legislative intent was clear and it recognized the need to regulate the
broadcasting service.

The Tribunal then dealt with the broadcasters' challenge to the SIA,
which, unlike RIO that is framed by the broadcaster itself, was statutorily
prescribed and was thus clearly far more stringent than the provisions under
consideration in this case. The SIA was challenged on the ground that it
infringed the broadcasters' freedom of contract. Rejecting the submission the
Tribunal held: "Introduction of a standard format of the interconnect
agreement as prescribed by the Authority has been seriously challenged. It was
argued that this it (sic) curtails freedom of contract. The learned counsel for
the appellants submits that in the contractual regime there is complete freedom
for the parties to agree upon mutually accepted terms and conditions and there
is no scope for interference by way of prescribing a standard format of
agreement.

So far as this argument of complete freedom to contract is concerned,
first we have to note that the prescribed interconnect agreement comes into
play only after the parties fail to reach an agreement on their own for which
they have complete freedom.

Ten days' time has been allowed to parties to negotiate. If they
fail to arrive at an agreement within ten days, the prescribed agreement has to
be entered into. The appellants argued that this period of 10 days is too
short. We need not go into whether this period is short or whether it is
sufficient. Parties may approach the TRAI for extension of the period.
Secondly, Rule 10(4) of the CTN Rules, 1994 requires prescription of a standard
interconnect agreement by the Authority which the broadcasters and the MSOs have
to enter into in case they fail to arrive at mutually acceptable agreement. The
TRAI has carried out the mandate of the Rule.

The Rule is not challenged. Coming to the argument regarding curtailment
of freedom to contract, Article 19 (1)(g) of the Constitution gives the parties a freedom to trade which
includes freedom to contract. However, this freedom is subject to reasonable
restrictions. Even at the Common Law, there was never any absolute freedom to
contract, for instance, nobody could enter into a contract to do an illegal
act. As the society grew, need for regulation gradually increased and inroads
were made in the freedom to contract. Article 19 permits 'reasonable restrictions' being imposed in the domain of
freedom of contract. The TRAI Act and the CTN Act are both primary legislations which purport to
regulate the broadcasting service.

They provide for reasonable restrictions. The regulation is in the
interest of society. There is no challenge to these statutes. The legislation
permits curtailment of freedom to contract. It is settled that freedom of
contract is not available in absolute terms and it can be curtailed by
legislation for justifiable reasons. Power to regulate allows reasonable
restrictions on freedom to contract. The argument, therefore, is without any
merit and, therefore, has to be rejected."

22.6. Submissions have been made by placing reliance upon other
enactments by the learned Senior Counsel appearing for the fourth respondent,
such as, Sports, Broadcasting Signals (Mandatory) sharing with Prasar Bharati
Act, 2007. This Court is not willing to borrow the provisions contained
therein. Though an objection has been raised by the learned Senior Counsels
appearing for the petitioners that the said Act does deal with the content,
suffice it is to state that the entry is one and the same. Therefore, the
contentions that entry 31 of list 1 of VII Schedule does not deal with content
has no basis. However, we need not proceed further since the impugned regulation
itself reiterates the very same definition provisions ipso facto. Thus, on a detailed analysis of the provisions contained in the enactments
other than the TRAI Act, 1997, one cannot hold that there exists any conflict,
overlapping either incidental or direct and the field being occupied as against
the TRAI Act, which has got a specific role to play. These enactments can at
best be stated to sail along with the TRAI Act.

23. SUBMISSIONS OF THE PETITIONERS:

23.1. The learned Senior Counsels
while seeking to sustain the lead judgment, made the following submissions.

23.2. The impugned Regulations and the Tariff Order do impact content
and therefore, they ultra vires the TRAI Act, 1997 which does not have such a
power. TRAI Act can only regulate the carriage and not the content. Section
2(1)(k) can be divided into three parts viz., clauses of services of
transmission, method/means of transmission and technology of transmission.
Thus, it is restricted to a manner in which the service is made. The principle
of noscitur a sociis has to be applied to understand
Section 2(1)(k). Thus, the meaning which can otherwise be given to a
telecommunication service has to be imported and adopted for the broadcasting
service also. Section 11(1)(b), (c) and (e) do not confer any power to those
impugned proceedings. Section 11(2) merely deals with fields of operation.

23.3. Regulation of the content, price and packaging is governed by
the Copyright Act, 1957. Section 2 (dd) of the Copyright Act read with 2 (ff)
would only mean either an uplinking or downlinking. A deeming fiction has to be
taken to its logical conclusion. The amendment of the year 2012 takes away the
power, if any, in any other enactment, including, the rules framed under the
Cable Television Networks Regulation Act, 1995. Section 3(a) read with Rule 56
has to be seen giving right to a broadcasting right protection holder against a
distributor. Section 37 paves way for a Television Channel to be governed under
the Copyright Act. Thus, it is protected by the aforesaid provision. Therefore,
Copyright Act is a separate code governing the field, especially, after the
amendment made in the year 2012. It is not open to TRAI to contend otherwise
after a specific stand in the counter affidavit. The role of TRAI under the
Cable Television Networks (Regulation) Act, 1995 is very limited.

23.4. Shri P.Chidambaram, in his inimitable style gives en example
of a "Goods Train" carrying the goods to the destination.

Accordingly, it is submitted that the function of TRAI under the
Act is to charge only a carriage fee, deal with related aspects and thus, cannot
travel beyond it. Shri. Abhishek Singhvi in his reply placed reliance upon
three judgments to buttress the submission that even before a communication to
the public occurs, broadcast takes place.

They are: “(i) GARWARE PLASTICS &
POLYESTER LTD., V. TELELINK & OTHERS ETC., (1989) Supreme Court Cases
Online Bom 29); (ii) SUPER CASSETTES INDUSTRIES PVT. LTD., V. SBN NETWORK (2016
SCC Online Del 5926); and (iii) JAK COMMUNICATIONS PVT. LTD., VS. SUN TV NETWORK
LTD, AND OTHERS ((2010) 2 Law Weekly 936)” 23.5. Insofar as the deferring judgment is concerned, it is submitted
that the scope and ambit of the enactments have been wrongly understood. The
finding rendered on the amendment made in the year 2012 amending Section 39-A
cannot be sustained. It is wrong to construe that the Copyright Act deals with
a copyright owner vis a vis a licensee viz., broadcasting right holder. The
amendments do control a dispute between a broadcaster and the distributor. If a
finding could be given on the cap fixed for the MRP of the bouquet along with
restrictions on the discount of channels, the same logic ought to have been
extended to the other clauses contained in the Regulations and the Tariff Order.

24. SUBMISSIONS OF THE RESPONDENTS:

24.1. The learned Senior counsels
appearing for the respondents submitted that there is sufficient power
available under the TRAI Act to pass the impugned proceedings. The impugned
proceedings cannot be termed as regulating the content for which the power is
also otherwise available. The counter affidavit filed has to be seen in the
context of the challenge made to the impugned Regulations and Tariff Order. It cannot
be read in isolation. The power conferred under Sections, 11, 12 and 13 read
with Section 36 of the TRAI Act is rather wide and exhaustive.

24.2. The other enactments are to be seen as assisting the TRAI Act
excluding the copyright which deals with a different aspect altogether. There
is no right recognised under the Copyright Act in favour of the TV Channel.
Rule 10 of the Cable Television Networks (Regulation) Act, 1995, has been
wrongly construed. In any case, the power conferred cannot be transported
through the amendment made to the Copyright Act, 1957. In the lead judgment, it
has been proceeded on the wrong factual premise that bouquets are market driven.
They are nothing but creation of broadcasters. The TRAI Act deals with
different actors with specific emphasis on public interest.

Merely because the petitioners are affected, it cannot be said
that content is involved. The TRAI Act and the Cable Television Networks (Regulation)
Act, 1995 deal with the same entry. There is no challenge to the provision of
the TRAI Act. The lead decision does not consider the scope of TRAI Act in the
right perspective. There is no basis indicated on the conclusion that the
content is involved. The decision rendered in PETROLEUM AND
NATURAL GAS REGULATORY BOARD V. INDRAPRASTHA GAS LIMITED AND OTHERS (2015) 9 Supreme
Court Cases, 209) has
to be seen contextually. Similarly, the decision relied upon by the petitioners
in ESPN STAR SPORTS V. GLOBAL BROADCAST NEWS LTD.,
(2008) (38) PTC 477 (DEL.) (DB) cannot be understood to hold that Section 37 of the Copyright Act protects
a television channel. Accordingly while rejecting the lead judgment, dissenting
one has to be concurred with.

25. DISCUSSION ON SUBMISSIONS:

25.1. Before proceeding further, let us once again
reiterate and reconfirm the scope and extent of scrutiny as understood by the parties
and accordingly, recorded duly by the Court. A reproduction of the relevant
passages would suffice.

4(b)............. However, it is crucial to note that writ petitioners have made it
clear that their challenge to the impugned clauses in the said regulations and
said tariff order is not a challenge on merits and that it is only a challenge
to the jurisdiction of the TRAI to come up with said regulations and said
tariff order.

4(c)Such a challenge to the jurisdiction of TRAI is predicated on one
core issue and that one core issue is that the jurisdiction of TRAI to regulate
and fix tariff is limited to carriage or 'means of transmission' and therefore
it cannot be extended to 'content' which according to the writ petitioners is
completely and comprehensively governed by the Copyright Act, 1957 (14 of 1957)
as amended with effect from 21.6.2012, which is hereinafter referred to as
'Copyright Act' for convenience and clarity.

6(g) .............The third reason is all parties to the lis agreed to
the aforesaid 18 clauses being treated as impugned clauses and all parties
agreed that the scope of the writ petitions shall be to test the constitutional
validity and vires qua TRAI Act of the aforesaid 18 clauses contained in two
tables.

6(h) To be noted, Dr.Abhishek Singhvi, learned Senior counsel leading
the counsel on record for the other writ petitioner also submitted that the
aforesaid 18 clauses in said regulations and said tariff order and challenge to
their constitutional validity and vires qua TRAI Act shall be the scope of the
writ petition, in his matter too.

6(i) Submissions of writ petitioners can be broadly summarised in simplified
terms as follows : (a)Writ petitioners are not assailing the impugned clauses on merits...........”

25.2. The
jurisdiction of the enactments have already been dealt with in extenso. Suffice
it is to state that TRAI Act involves regulation of airwaves and frequencies
being public properties, touches upon various stakeholders with primacy to the
public interest. To put it differently, the general public is the king, being the subscriber
whose interest should be guarded and protected under the Act as a prime factor.
TRAI in thus, obligated to take adequate measures as mandated by the statute.
The Cable Television Networks (Regulation) Act, 1995 and the Indian Telegraph
Act, 1885 go with the TRAI Act strengthening the hands of the authority. TRAI
Act came into being on the need enough to have a better enactment than the Telegraph
Act, 1885, supported and safeguarded by the Cable Television Networks
(Regulation) Act, 1995. This Act deals with cable television network. That is
the reason why, the authority is the same along with the definition of digital
addressable system and introduction transmission of programmes through digital
addressable system etc. Therefore, this enactment deals with the last part of the
broadcast. On the contrary, the Copyright Act deals with a different scenario
altogether. There are only two players involved. The object of the Act is to
protect the interest of the copyright holder and to the limited extent, a BRR
holder and a third party with a specific reference to the tariff scheme. As
discussed earlier, the BRR is not the same as a copyright though akin to it but
with its own limitation. It is also subject to the copyright of a owner.

25.3. Section 2(k) of the TRAI Act merely explains a telecommunication
service. Therefore, even assuming it can be divided into three parts as
suggested by the learned counsel for the petitioners, the conclusion does not
change as discussed supra. The TRAI Act does not deal with a mere means of
transmission alone. Perhaps the petitioners do understand it rather well. That is the reason
why they laid the challenge before the Division Bench of Delhi High Court to
the very provision. The principle governing the noscitur a sociis cannot be
applied as the petitioner suggested. There is no ambiguity on the definition provision.

25.4. The power conferred on the authority under Sections 11 to 13
has already been considered on quite a few occasions by the Courts. Nothing
more is required to be added in the light of the discussions made already. If
the contentions of the petitioners are accepted, the very provision contained
under Section 11(2) would become redundant and otiose, notwithstanding a
challenge in futility made before the Delhi High Court on the constitution
validity of Section 11(2) is much to the knowledge of the petitioners.

25.5. Notably, tariff orders of similar nature were being introduced
from time to time from the year 2004 onwards. Power to make regulation has been
provided under Section 36. The Courts have interpreted with such a power as
pervasive notwithstanding the other provisions. To be noted, the notification
No.39 has also not been challenged by the petitioners while challenging the
proviso to Section 2(1)(k). This notification has also added additional power
to the fourth respondent. To sum up, the TRAI Act being a centripetal, sector
specific one, involving the utilisation of the public property, having a
regulatory regime and to protect the public interest stands on its distinct
footing.

25.6. As rightly submitted by the learned Senior Counsel appearing
for the respondents, the permission obtained from the Central Government would
bring a broadcaster within the fold of a service provider. The petitioners
themselves claimed and raised disputes as service providers. A finding was also
rendered by the Court which reached finality. Thus, as a natural sequitor, the Regulations
and Tariff Order would ipso facto apply to the petitioners' case.

25.7. The other enactments certainly strengthen the hands of the
TRAI. Suffice it is to state that these enactments viz., Indian Telegraph Act,
1885, except the Cable Television Networks (Regulation) Act, 1995, have nothing
to do with the Copyright Act, 1957. Rule 10 of the Cable Television Networks
(Regulation) Rules, 1994, as it stands today strengthens the authority to deal
with the difficulties faced in implementing a uniform system, including the notified
areas. There is nothing to contradict the detailed analysis made, in the
explanatory memorandum in this regard. In any case, such a power cannot be imported
into the amendment of the year 2012 of the Copyright Act, which obviously deals
with a different scenario.

25.8. We have also discussed at length on the interpretation and meaning
of the provision contained in the Copyright Act. The submissions made by the
learned Senior Counsels for the petitioners that a broadcast takes place a
moment of uplinking and downlinking, which is certainly contrary to the
Copyright Act. Any such interpretation would directly violate the provisions
including the definition section contained under Section 2(dd) and 2(ff) of the
Act. We may note that an encrypted form being a facet of cryptography involves
secret writing and code.

25.9. The other provisions actually give sufficient protection to the
copyright holder as against the licensee which may be the broadcaster having
broadcasting reproduction right. The scheme of the Act read with the
parliamentary debate and discussion with reference to the specific speech of
the Honourable Minister for Information and Broadcasting makes the position
very clear.

25.10. Sections 37 and 39 also will not help the case of the petitioners.
While there is no BRR involved under the TRAI Act, no right has been given to a
television channel under Section 37 of the Copyright Act. Merely because, the
television channel becomes a broadcaster, no independent right can be placed as
against the “broadcasting” which may involve any work or a programme coming under
the Act's purview. In this connection, the definition of TV Channel as
adumbrated in the impugned regulations will have to be seen. While the
copyright does not make any reference to a TV Channel, it has been referred
accordingly as such, only after obtaining permission for downlinking under the
impugned regulations. Therefore, the TV channel has been understood in a very
restrictive manner under the impugned regulations. Needless to state that the
Cable Television Networks (Regulation) Act, 1995, also deals with the television
channel as against the Copyright Act.

25.11. This Court is of the considered view that having drawn the
lines and fixed the goal post with the agreement of the parties, the issue as
to whether the impugned Regulations and the Tariff Order deal with a content or
a carriage as understood by the petitioners is irrelevant. That the petitioners
are affected by the impugned Regulations and Tariff Order is not in doubt.
Therefore, the question which is appropriate shall be the existence of the
power under the TRAI Act vis a vis the Copyright Act, 1957. Hence, the question
of carriage or content has to be seen contextually through the enactments along
with their objects. It is also to be seen under the TRAI Act from the point of
view of the end user.

25.12. Since the learned counsel appearing for the petitioners repeatedly
insisted to go into the said issue, it is reluctantly touched upon. A content
has to be seen in the programme and not the channel. Merely identifying or
categorising a channel either in a group or stand alone would not amount to
interference in content. What is involved here is the reach of a particular
channel in a specific way or mode, giving several options to choose qua a
subscriber. A content in a programme is different from that of the channel.
There is absolutely nothing to hold that the content in a broadcast or a
programme is interfered with. Similarly, the content of a channel is absolutely
preserved and taken as such. For example, a movie to be telecasted is not
interfered with and so also the nature. It is nothing but an attempt to stop an
unilateral thrust of unwarranted dust along with grain. Suffice it is to state
that there is sufficient and ample power for the creation of the impugned
Regulations and the Tariff Order under the TRAI Act.

25.13. On considering the submissions and perusal of the documents
an admitted fact can be seen. The petitioners though admitted and accepted
several suggestions made by the TRAI during the consultation process,
nonetheless for the reasons known, have challenged them. In specific terms,
they have stated the following facts.

* TRAI must undertake a comprehensive review of the interconnect
regulations, quality of service regulations etc.

* Transparent and non-discriminatory principles across all distribution
platforms.

*TRAI must regulate price caps for mass genres like entertainment,
movies & sports – Contrary to this, now after price forbearance given in
respect of TV channels, the petitioners have performed a spectacular U-turn and
are raising frivolous concerns regarding high cost of acquisition of content.

*The wholesale price cap must be fixed by TRAI at Rs.28/- to monetize
flagship channel(hence, this concept of flagship channel, driver channel etc
was understood and described by the petitioner -during the course of the
hearing however, they feigned ignorance) * Transparency in Discounts *Wholesale
cap tobe fixed on discounts at a maximum overall cap of 33% * Conditions to
regulate bouquets *Maximum discount on multi-broadcaster retail bouquet to be capped
at 33%

25.14. They have also requested the
bundling of HD and SD channels not to be allowed. This could be seen from the
following statement made by them before TRAI as recorded under the consideration
paper dated 29.02.2016.

“ 3.Bundling of HD and SD channels should not be allowed,both at wholesale
and retail leves; 4. Charging of access fee for HD channels should not be
allowed at retail level; 5.DPOs free to sell HD channels as a-la-care as well as bouquet(s) of
HD channels; 6.Consumers and DPOs should have a choice to subscribe to only HD
Channels or only SD channels or both combined but purchased separately.” 25.15. Thus a party, who approbates
and reprobates should not be shown any indulgence by the Court. Certainly, the
law governing "issue estoppel" would also come into play. It also
applies to the declaration made by the Court on the basis of the stand taken by
the petitioners that it is a service provider under the TRAI Act.

25.16. Now let us see the decision relied upon by the learned counsels
appearing for the petitioners. In PETROLEUM AND NATURAL GAS
REGULATORY BOARD V. INDRAPRASTHA GAS LIMITED AND OTHERS (2015) 9 Supreme Court
Cases, 209),
the issue was with reference to the determination of network tariff and
compression charges. A challenge was laid on the legislative competency. The Apex
Court while considering the relevant provision viz., Sections 21 and 22 read
with Section 11, which speaks of power and functions of the Board, held that
there is no legislative intent apart from lack of jurisdiction. Accordingly, it
was held that the operative words to Section 22 which dealt with only
transportation tariff is subject to Section 11, which does not provide such a
power to the Petroleum and Natural Gas Regulatory Board. Clearly the facts
herein are totally different. There is no opening words as available in Section
22 of the Petroleum and Natural Gas Regulatory Board, 1956 nor Section 11 of the
Act is pari materia to Section 11, which we are concerned with. The scope, provision and object of the enactments are also
different. Therefore, on the settled principle of law that a decision is only
an authority for what it decides and therefore, cannot be treated like a statute,
it is accordingly held that the same has got no application.

25.17. ESPN STAR SPORTS V. GLOBAL BROADCAST NEWS LTD., (2008)
(38) PTC 477 (DEL.) “ Furthermore, under Section 37 of the Act, broadcast reproduction
right has been defined as a special right available to every broadcasting
organization qua its broadcasts. The term "broadcast" has been
separately defined under Section 2(dd), as a communication to the public. It is thus evident that there could
be both copyright and broadcasting reproduction right which could separately
co-exist. As an example the copyright of cinematography film being broadcast on
a satellite channel vests with the producer of the film whereas the broadcast reproduction
right for the same vests with the broadcaster channel itself. The recording of
such movie and unauthorized re-telecast by cable operators could thus result in
violation of two separate rights. The first being the copyright which vests with
the producer and second the broadcast reproduction right which vests with the
broadcaster channel. These rights may vest with two different persons or even
with the single person which is evident from the Act. Section 51 of the Copyright Act deals with
acts constituting infringement of a copyright and Section 37(3) separately deals with acts
constituting infringement of broadcast reproduction rights. Emphasis have been
placed upon Section 39-A which
provides that Sections 18, 19, 30, 53, 55, 58, 64, 65 and 66 shall with any
necessary adaptations and modifications apply in relation to the Broadcast
reproduction right in any broadcast. This clearly showed the legislative intent
as to which provision of the Act would apply to both copyright and also
broadcast reproduction right and by necessary implication Sections not so
specifically provided would not ipso facto apply to the broadcast reproduction
right. Sections 13 and 14 of the Copyright Act make it clear that
copyright will subsist only in 'work' and that does not include 'broadcast'.
This clearly demonstrates that the broadcast rights particularly in respect of telecast
of live events are separate and distinct from copyright available in Chapter
XII of the Act. The definition of 'broadcast' under Section 2(dd) and the definition of
'communication to the public' under Section 2(ff) of the Act further emphasize the fact that Section 61 is not applicable to the
proceeding for infringement of Broadcasting Reproduction Right and that application
of Section 61 is limited to the cases
where an exclusive licensee of a copyright institutes a suit or proceeding for
infringement of copyright.”

25.18. The aforesaid paragraph does not recognise a separate right
of television channel under Section 37 of the Copyright Act. On the contrary,
it clearly states that the copyright and broadcasting reproduction right would
separately co-exist. The Court was merely dealing with the scope and extent of
the power under Section 37. In other words, there is no express recognition of
a right qua a television channel as against a broadcaster. Such a right is
obviously confined to the broadcast made. At the cost of repetition, it has to
be reiterated that Section 37 is broadcast centric and not television.

25.19. The three decisions relied upon by the Shri Dr. Abhishek Singhvi,
also cannot help the case of the petitioners. They are dealing with a fact
situation involving two private parties qua an analogue - non addressable
system. Secondly, it does not involve either TRAI or the element of public
interest. Thirdly, the broadcast did take place which certainly gives right to
a broadcaster. Therefore, this judgment cannot be pressed into service to hold
that a BRR will have to be extended even before a broadcast takes place. After
all, as discussed in length already, it does take place only when it results in
the communication to the public as defined under Section 2 (ff) of the Copyright
Act, 1957. Thus, the aforesaid judgments do not help.

25.20. From the above discussions, the contentions raised by the
learned Senior Counsel for the petitioners are accordingly rejected. Consequently the issues are answered against the petitioners.

26. LEAD JUDGMENT:-

26.1. The other contentions raised by the learned counsels which
have not been dealt already but discussed in the lead judgment are considered
now. In the lead judgment, a conclusion has been arrived at on the basis that
assortment of channels as bouquet is market driven. The petitioners are
affected by the regulations. The counter affidavit acknowledges the factum of
lack of jurisdiction over content. TRAI can act in public interest by making
regulation only with respect to carriage alone. No third party has come forward
to raise his grievance. Statutes are governed by different entries and
therefore, the source of powers are limited resulting in lack of jurisdiction
under the TRAI Act. The amendment made to Rule 10 of the Cable Television Networks
(Regulation) Act, 1995, has to be seen along with the amendment brought forth
in the year 2012 to the Copyright Act, 1957. The impugned Regulations and Tariff Order do deal with the content.

26.2. It is to be noted that as discussed repeatedly, there is no need
to go into the issue as to whether the impugned Regulations and the Tariff
Order touch upon the content or carriage as contended by the petitioners. After
all, it is the perspective of the parties. The learned Judge has specifically
recorded the factum of scope of lis "by consent". The question as to
whether the offering of the channels of a bouquet is market driven is totally
irrelevant. We are not on the reason, logic and rationale behind the impugned
regulations. It is the specific case of the TRAI that it is not market driven
but the very market is driven by the broadcasters by making such offers,
leaving no room for any choice to the end user-subscriber. According to it, it involves
inflation of the prices, artificial adjustments, which may be called as smart
business methodology but not helping the cause of the general public and the
new entrants. Therefore, the premise on which the entire matter proceeded with
due respect is not correct.

26.3. The decisions referred to supra would clearly show that the so
called conflicting enactments stand apart from each other. They neither attract
collision nor incidental overlapping. The scope of the provisions of the TRAI
Act relatable to the object has been dealt with extensively by the Courts
already. This cannot be restricted to the so called carriage, which has got no
factual or legal backing. It has also to be noted that the impugned regulations
and the tariff order can never be introduced under the Copyright Act. There is
no element of public interest therein. When once it is conceded that it is the
duty of the TRAI to take care of the public interest, the presence of the
public and the absence of any complaint become immaterial and irrelevant.

26.4. The counter affidavit filed was relied upon to a large extent.
With respect, the counter affidavit proceeded on the basis that what is
regulated is only a carriage. The other paragraphs in the counter affidavit
also stated that even if, in a case of content, such a power is available
though not relevant for the purpose of this case. Thus, the question that ought to have been answered is the
existence of the power for the creation of the impugned Regulations and the Tariff
Order.

26.5. It is to be noted that both the Cable Television Networks (Regulation)
Act, 1995, and the TRAI Act are coming under entry 31 of List I of VII
schedule. Therefore, if once competency is attributable to the Cable Television
Networks (Regulation) Act, 1995, it is axiomatic that the same has to be
extended to the TRAI Act as well. On the same analogy, a power conferred under
the aforesaid Act cannot be imported into the Copyright Act through the
amendments made. Merely because the petitioners are affected, the impugned
regulation and the amendment would not partake the character of content. While there is no material to support the conclusion on content,
as contended by the petitioners, the judgments inter se governing the field have not been taken note of. The fact that
similar tariff orders which may according to the petitioners would involve
content have been in force unchallenged or failed in challenge from the year
2004 onwards was also not taken note of. The effect of the decision would in a
way obliterate the very power of the TRAI to regulate. Thus, with due respect
to my learned brother, I am unable to agree with the decision made, though it
is a sheer pleasure to read.

26.6. A contention has been made by the learned Senior counsel appearing
for the fourth respondent that even the impugned tariff orders have been noted
as a regulation. This Court is of the view that though the said submission
appears to be true, it may not have any impact on the ultimate decision, which
is one of availability of the power under the TRAI Act, 1997 as against the
Indian Copyright Act, 1957.

27. DISSENTING VIEW:

27.1. In her short, yet clear decision, the Hon'ble Chief Justice has
held that there is sufficiency of the power under the TRAI Act as against the
Indian Copyright Act, 1957. They travel in their respective paths, not intended
to cross. The scope of the amendments made in the year 2012 along with Section
37 was correctly dealt with. This Court is of the view that the Copyright Act
has rightly taken note of being the one which gives succour to the copyright
holder as against the licensee, who may also be a BRR holder. It was rightly
held that the provisions deal with the protection of the right of the copyright
holder. It is rather pertinent to keep in mind the discussion on the
Copyright Act, 1957, which is to be seen contextually qua the issue i.e.,field being
occupied. This Court also does not find anything wrong with the finding given
on the so called concession given by the learned counsel for the TRAI being
inconsequential, as the very jurisdiction of the Act itself was taken for
consideration. The finding has to be seen contextually along with the other
issues including the overall stand taken in the counter affidavit of
respondents 1 to 4. Similarly the self imposed restrictions while invoking the
extraordinary jurisdiction under Article 226 of the Constitution of India,
deserves to be concurred with.

27.2. Though a submission has been made on the decision arrived at
with respect to the fixation of cap at 15% discount on the MRP of the bouquet
and the discounts given under the tariff order, the aforesaid decision cannot
be a ground to hold that the ultimate conclusion arrived at on the other issues
would necessarily follow suit. After all, as a reference Court, this Court is concerned with the
views expressed by either of the learned Judges on the points of difference. Accordingly, the dissenting judgment stands concurred.

28. In the result, this reference qua
points of difference stands ordered concurring with the dissenting judgment. No
costs.